The alpha7 nicotinic acetylcholine receptor (nAChR) is a ligand-gated ion channel that modulates neurotransmitter release in the central nervous system. We show here that functional, homo-oligomeric alpha7 nAChRs can be synthesized in vitro with a rabbit reticulocyte lysate translation system supplemented with endoplasmic reticulum microsomes, reconstituted into planar lipid bilayers, and evaluated using single-channel recording techniques. Because wild-type alpha7 nAChRs desensitize rapidly, we used a nondesensitizing form of the alpha7 receptor with mutations in the second transmembrane domain (S2'T and L9'T) to record channel activity in the continuous presence of agonist. Endoglycosidase H treatment of microsomes containing nascent alpha7 S2'T/L9'T nAChRs indicated that the receptors were glycosylated. A proteinase K protection assay revealed a 36-kDa fragment in the ER lumen, consistent with a large extracellular domain predicted by most topological models, indicating that the protein was folded integrally through the ER membrane. alpha7 S2'T/L9'T receptors reconstituted into planar lipid bilayers had a unitary conductance of approximately 50 pS, were highly selective for monovalent cations over Cl(-), were nonselective between K(+) and Na(+), and were blocked by alpha-bungarotoxin. This is the first demonstration that a functional ligand-gated ion channel can be synthesized using an in vitro expression system.