Hypoglycemic brain injury is a common and serious complication of insulin therapy associated with diabetes. This study evaluated the effect of insulin-induced hypoglycemia and STZ-induced diabetes on striatal cholinergic receptors and enzyme expression and on motor function. Cholinergic enzymes: AChE and ChAT gene expression, radioreceptor binding assay and immunohistochemistry of muscarinic M1, M3 receptors and α7nAChR were carried out. Motor performance on grid walk test was analysed. AChE and ChAT expression significantly downregulated in hypoglycemic and diabetic rats. Total muscarinic and Muscarinic M3 receptor binding decreased in hypoglycemic rats compared to diabetic rats whereas muscarinic M1 receptor binding increased in hypoglycemic rats compared to diabetic rats. Real-time PCR analysis and confocal imaging of muscarinic M1, M3 receptors confirmed the changes in muscarinic receptor binding in hypoglycemic and diabetic rats. In hypoglycemic rats, α7nAChR expression significantly up regulated compared to diabetic rats. Grid walk test demonstrated the impairment in motor function and coordination in hypoglycemic and hyperglycemic rats. Neurochemical changes along with the behavioral data implicate a role for impaired striatal cholinergic receptor function inducing motor function deficit induced by hypo and hyperglycemia. Hypoglycemia exacerbated the neurobehavioral deficit in diabetes which has clinical significance in the treatment of diabetes.