RIC-3 (resistant to inhibitor of cholinesterase) is a transmembrane protein, found in invertebrates and vertebrates, that modulates the surface expression of a variety of nicotinic acetylcholine receptors (nAChRs) in neurons and other cells. To understand its mechanism of action, we investigated the cellular location, transmembrane topology and cellular mechanism by which RIC-3 facilitates ␣7 assembly and surface expression in cultured mammalian cells. We show that the mouse protein is targeted to the ER by the first 31 aa which act as a cleavable signal sequence. The mature protein is a single-pass type I transmembrane protein whose N terminus resides in the lumen of the ER with the coiled-coil domain in the cytoplasm. RIC-3, which binds both unfolded and folded ␣7 subunits, facilitates the surface expression of receptor principally by promoting the folding and assembly of the ␣7 subunits in the ER into fully polymerized receptor. Functional analysis shows that facilitation of surface expression of ␣7 in mammalian cells is reduced in RIC-3 mutants lacking the signal peptide, the lumenal segment or the coiled-coil domain, but not in mutants lacking the long C-terminal region downstream of the coiled-coil domain. We show that the coiled-coil domain of mRIC-3 is not required for the interaction of mRIC-3 with ␣7, but does mediate a homotypic interaction between molecules of mRIC-3. We suggest that efficient assembly of the homomeric ␣7 nAChR may thus require mRIC-3 self-association through the cytoplasmic coiled-coil domain and suggest a model by which this may occur.