We tested the hypothesis that membrane lipid composition influences drug action at membrane proteins by studying local anesthetic action at the nicotinic acetylcholine receptor (nAChR). Infrared difference spectra show that concentrations of tetracaine consistent with binding to the ion channel (<50 microM) stabilize a resting-like state when the nAChR is reconstituted into phosphatidylcholine membranes containing the anionic lipid, phosphatidic acid, but have no effect on the nAChR reconstituted into membranes lacking phosphatidic acid, either in the presence or absence of cholesterol. Concentrations of tetracaine above 200 microM lead to neurotransmitter site binding in all membranes. In the presence of phosphatidic acid, cholesterol, or both, neurotransmitter site binding leads to the formation of quaternary amine-aromatic interactions between tetracaine and binding site tyrosine/tryptophan residues and the stabilization of a desensitized state. One interpretation suggested by lipid partitioning studies is that phosphatidic acid enhances tetracaine action at the channel pore by increasing the partitioning of tetracaine into the lipid bilayer, thereby enhancing access to the transmembrane pore. However, subtle membrane-dependent variations in the vibrations of tyrosine and tryptophan residues, and agonist analog binding studies indicate that the structures of the agonist-bound neurotransmitter sites of the nAChR in membranes lacking both phosphatidic acid and cholesterol differ from the structures of the agonist-desensitized neurotransmitter sites in the presence of both lipids. Lipid action at the nAChR thus involves more than a simple modulation of the equilibrium between resting and desensitized states.