Acetylcholine binding protein (AChBP) is a novel protein with high similarity to the extracellular domain of the nicotinic acetylcholine receptor. It is secreted from glia cells in the freshwater snail, Lymnaea stagnalis, where it modulates neuronal transmission. AChBP forms homopentamers with pharmacology that resembles the alpha7 nicotinic receptors. In the crystal structure of AChBP at 2.7 A, each protomer has a modified immunoglobulin fold. Almost all residues shown to be involved in ligand binding in the nicotinic receptor are found in a pocket at the subunit interface. This pocket is lined with aromatic residues, and filled with a HEPES buffer molecule. The AChBP crystal structure explains many of the biochemical studies on the nicotinic acetylcholine receptors. Surprisingly the interface between protomers is relatively weakly conserved between family members in the superfamily of pentameric ligand-gated ion channels. The lack of conservation has implications for the mechanism of gating of the ion channels.