Allosteric modulators are ligands that bind to a site on the receptor that is spatially separated from the orthosteric binding site for the endogenous neurotransmitter. Allosteric modulators modulate the binding affinity, potency and efficacy of orthosteric ligands. Muscarinic acetylcholine receptors are prototypical allosterically-modulated G-protein-coupled receptors. They are a potential therapeutic target for the treatment of psychiatric, neurologic and internal diseases like schizophrenia, Alzheimer’s disease, Huntington disease, type 2 diabetes or chronic pulmonary obstruction. Here we review progress made during the last decade in our understanding of their mechanisms of binding, allosteric modulation and in vivo actions of in order to understand the translational impact of studying this important class of pharmacological agents. We overview newly developed allosteric modulators of muscarinic receptors as well as new spin-off ideas like bitopic ligands combining allosteric and orthosteric moieties and photo-switchable ligands based on bitopic agents.