Ligand-gated ion channels mediate fast intercellular communication in response to endogenous neurotransmitters. The nicotinic acetylcholine receptor (AChR) is the archetype molecule in the superfamily of these membrane proteins. Early electron spin resonance studies led to the discovery of a lipid fraction in direct contact with the AChR, with rotational dynamics 50-fold slower than those of the bulk lipids. This AChR-vicinal lipid region has since been postulated to be a possible site of lipid modulation of receptor function. The polarity and molecular dynamics of solvent dipoles-mainly water-of AChR-vicinal lipids in the membrane have been studied with Laurdan extrinsic fluorescence, and Forster-type resonance energy transfer (FRET) was introduced to characterize the receptor-associated lipid microenvironment. FRET enabled one to discriminate between the bulk lipid and the AChR-vicinal lipid. The latter is in a liquid-ordered phase and exhibits a higher degree of order than the bulk bilayer lipid. Changes in FRET efficiency induced by fatty acids, phospholipids and cholesterol also led to the identification of discrete sites for these lipids on the AChR protein. After delineating the topography of the AChR membrane-embedded domains with fluorescence methods, sites for steroids are being explored with site-directed mutagenesis and patch-clamp recording. Pyrene-labelled Cys residues in alphaM1, alphaM4, gammaM1 and gammaM4 transmembrane regions were found to lie in a shallow position. For M4 segments, this is in agreement with a canonical linear alpha-helix; for M1, it is necessary to postulate a substantial amount of non-helical structure, and/or of kinks, to rationalize the shallow location of Cys residues. Mutations of Thr422, a residue close to the extracellular-facing membrane hemilayer in alphaM4, affect the steroid modulation of AChR function, suggesting its involvement in steroid-AChR interactions.