Despite the discovery of a diverse range of novel agonists and allosteric modulators of the M(4) muscarinic acetylcholine (ACh) receptor (mAChR), little is known about how such ligands activate the receptor. We used site-directed mutagenesis of conserved residues in TMIII, a key region involved in G protein-coupled receptor (GPCR) activation, to probe the binding and function of prototypical orthosteric mAChR agonists, allosteric modulators and atypical agonists. We found that most mutations did not affect the binding of the allosteric modulators, with the exception of W108(3.28)A and L109(3.29)A (which may contribute directly to the interface between allosteric and orthosteric sites) and mutation D112(3.32)N (which may be due to global disruption of a hydrogen bond network). Although numerous mutations affected signaling, we did not identify amino acids that were important for the functional activity of any one class of agonist (orthosteric, allosteric or atypical) to the exclusion of any others, suggesting that TMIII is key for transmission of stimulus irrespective of the agonist. We also identified two key residues, Trp-108(3.28) and Asp-112(3.32), that are essential for the transmission of binding cooperativity between 3-amino-5-chloro-6-methoxy-4-methyl-thieno[2,3-b]pyridine-2-carboxylic acid cyclopropylamide (LY2033298) and ACh. Finally, we found that LY2033298 was able to rescue functionally impaired signaling of ACh at the majority of mutants tested in a manner that was inversely correlated with the ACh signaling efficacy, indicating that a key part of the mechanism of the positive cooperativity mediated by LY2033298 on the endogenous agonist involves a global drive of the receptor towards an active conformation.