Final answer:
Acetylcholine (ACh) is the neurotransmitter released at the postganglionic synapse of parasympathetic nerves, and it binds to muscarinic receptors on target cells.
Step-by-step explanation:
The neurotransmitter released at the postganglionic synapse of parasympathetic nerves is acetylcholine (ACh). In the autonomic nervous system, both the sympathetic and parasympathetic divisions release neurotransmitters that affect their target cells. For the sympathetic division, the postganglionic fibers typically release norepinephrine, while for the parasympathetic division, the neurotransmitter released is ACh. This release of ACh by the postganglionic parasympathetic fibers will bind to muscarinic receptors on target cells, affecting functions such as constricting the pupil or stimulating salivation.