We examined the soluble fraction from homogenates of 12-day embryonic chick heart for the presence of an endogenous modulator of muscarinic acetylcholine receptors (mAChR). Homogenates were separated into 100,000 g soluble and crude membrane fractions by differential centrifugation. Aliquots of membranes were incubated in the presence or absence of the soluble fraction and the muscarinic antagonist, [3H]quinuclidinyl benzilate ( [3H]QNB), and the data subjected to Scatchard analysis. In the presence of the soluble fraction, mAChR number decreased up to 70% and the affinity for [3H]QNB decreased six- to eightfold. These results suggested that an endogenous soluble factor (ESF) affected cholinergic ligand binding to the receptor. The amount of ESF extracted from less than 10 mg of brain was sufficient to reduce by 50% [3H]QNB binding to 50 fmol mAChR. ESF activity was partially purified by heat and acid treatment. The loss of receptors was dependent upon the amount of ESF added and was time dependent. QNB protected some receptors from loss due to ESF. The change in mAChR affinity for [3H]QNB was observed only if ESF was present continuously during the [3H]QNB binding assay. Ultrafiltration and gel filtration showed that ESF was less than 10,000 daltons and probably less than 700 daltons. ESF activity was blocked by EDTA. However, ESF was not a divalent cation since it was base labile, and removal of divalent cations with Chelex-100 did not inhibit ESF activity. ESF activity was also blocked by catechol, catecholamines, ascorbate, and dithiothreitol. ESF was present in embryonic but not in adult heart.