Investigation of the mechanisms by which the subunits of ligand-gated ion channels fold and associate to form oligomers has been hampered by the lack of an in vitro system in which these reactions occur. We have established conditions in a rabbit reticulocyte translation system supplemented with canine pancreatic microsomes under which the ␣ and ␦ subunits of the nicotinic acetylcholine receptor (AChR) fold and assemble to form a heterodimer with a cholinergic binding site comparable with that found in the intact AChR. Folding of the ␣ subunit was followed by its ability to bind ␣-bungarotoxin. Folding efficiency was highly sensitive to changes in the redox potential of the translation medium and was favored by an oxidizing environment. Acquisition of the toxin binding conformation required N-linked core glycosylation but not oligosaccharide trimming, suggesting that oligosaccharide-dependent interaction of chaperones with the ␣ subunit is not essential for correct subunit folding. The conformationally mature ␣ subunit specifically associated with the ␦ subunit but not the  subunit to form a heterodimer with a high affinity ligand-binding site. These data demonstrate, for the first time, correct folding and assembly of the AChR subunits in an in vitro system. The muscle acetylcholine receptor (AChR) 1 is the best understood member of a family of ligand-gated ion channels that mediate fast synaptic transmission in the nervous system. All members of the family share a common structure in which five subunits form a pseudosymmetric array around a central aqueous pore (1). When the channel is activated by binding neurotransmitter, the pore opens, allowing ions to flow into and out of the cell, thus changing the membrane potential. The muscle AChR and the closely related AChR from Torpedo electric organ (2) consist of four homologous subunits (3) whose stoichiometry is ␣ 2 ␥␦ (1). Each of the subunits has the same transmembrane topology, with a long, N-terminal, extracellular domain, four transmembrane regions, and a short C-terminal tail (1). The two ligand-binding sites that each receptor possesses are associated with the N-terminal domains of the two ␣ subunits (4, 5). The sites, which have distinctive pharmacological properties, are thought to lie at or near the interface between each ␣ subunit and either the ␥ or ␦ subunit, respectively (6, 7).Each of the subunits of the muscle AChR is synthesized as a separate polypeptide chain (8) that is translocated into the ER, where the signal sequence is cleaved (8), the core glycosyl residues are added (8, 9), and the N-terminal domain is folded (10, 11). The folded, glycosylated polypeptide chains then associate with each other to form the pentameric AChR (11, 12). The assembled receptor is transported to the Golgi, where further modifications such as complex carbohydrate addition and fatty acid acylation (13, 14) take place. The mature AChR is then transported to the surface. The entire process takes about 90 min (11).Assembly of the AChR subunits occurs by a define...