The ␣7 nicotinic acetylcholine receptor (nAChR), a homopentameric, rapidly activating and desensitizing ligand-gated ion channel with relatively high degree of calcium permeability, is expressed in the mammalian central nervous system, including regions associated with cognitive processing. Selective agonists targeting the ␣7 nAChR have shown efficacy in animal models of cognitive dysfunction. Use of positive allosteric modulators selective for the ␣7 receptor is another strategy that is envisaged in the design of active compounds aiming at improving attention and cognitive dysfunction. The recent discovery of novel positive allosteric modulators such as 1-(5-chloro-2-hydroxyphenyl)-3-(2-chloro-5-trifluoromethylphenyl)urea (NS-1738) and 1-(5-chloro-2,4-dimethoxyphenyl)-3-(5-methylisoxazol-3-yl)urea (PNU-120596) that are selective for the ␣7 nAChRs but display significant phenotypic differences in their profile of allosteric modulation, suggests that these molecules may act at different sites on the receptor. Taking advantage of the possibility to obtain functional receptors by the fusion of proteins domains from the ␣7 and the 5-HT 3 receptor, we examined the structural determinants required for positive allosteric modulation. This strategy revealed that the extracellular N-terminal domain of ␣7 plays a critical role in allosteric modulation by NS-1738. In addition, ␣7-5HT 3 chimeras harboring the M2-M3 segment showed that spontaneous activity in response to NS-1738, which confirmed the critical contribution of this small extracellular segment in the receptor gating. In contrast to NS-1738, positive allosteric modulation by PNU-120596 could not be restored in the ␣7-5HT 3 chimeras but was selectively observed in the reverse 5HT 3 -␣7 chimera. All together, these data illustrate the existence of distinct allosteric binding sites with specificity of different profiles of allosteric modulators and open new possibilities to investigate the ␣7 receptor function.The ␣7 nicotinic acetylcholine receptor (nAChR) belongs to the family of ionotropic receptors that share four transmembrane domains as a common structural feature (for review, see Hogg et al., 2005). By virtue of its high expression levels in brain regions involved in learning and memory, such as hippocampus and cerebral cortex, and its unique physiological properties, partly attributed to a high permeability to Ca 2ϩ , the ␣7 nAChR has received considerable attention as drug target for development of drugs intended to treat cognitive/attention disorders underlying neuropsychiatric and neurodegenerative diseases (for review, see Dani and Bertrand, 2007). Furthermore, despite its low sensitivity to acetylcholine, the ␣7 nAChR has been shown to modulate the release of other neurotransmitters and, in some cases, to contribute directly to signal transmission (for review, see Wonnacott et al., 2006).Gene knock-out and antisense studies together with pharmacological studies using small-molecule selective agonists and positive allosteric modulators have demon...