Nicotinic acetylcholine receptors are ligand gated ion channels that mediate fast chemical neurotransmission at the neuromuscular junction and play diverse signaling roles in the central nervous system. Here we describe a biochemical approach for characterization of subunit stoichiometry in heteromeric membrane proteins and present the first X-ray crystal structure of a nicotinic receptor. The α4β2 nicotinic receptor is the most abundant receptor subtype in the brain, is the principal target in nicotine addiction and its dysfunction is associated with familial epilepsy. The structure of the receptor in complex with the agonist nicotine reveals principles of ligand selectivity among different classes of subunit interfaces in the heteropentameric assembly. The receptor is stabilized by nicotine in a non-conducting, desensitized conformation. The constriction point in the permeation pathway is formed at the selectivity filter, located at the cytosolic end of the pore. The desensitized state of this channel provides a distinct structural reference point in the allosteric gating cycle of the larger Cys-loop receptor superfamily.