The interaction between the effects of the endogenous cannabinoid receptor agonist anandamide and ethanol on the function of homomeric α7- nicotinic acetylcholine (nACh) receptors expressed in Xenopus oocytes were investigated using the two-electrode voltage-clamp technique. Anandamide and ethanol reversibly inhibited currents evoked with 100 μM acetylcholine in a concentration-dependent manner. Coapplication of anandamide and ethanol caused a significantly greater inhibition of α7-nACh receptor function than anandamide or ethanol alone. The IC50 value of 238 ± 34 nM for anandamide inhibition decreased significantly to 104 ± 23 nM in the presence of 30 mM ethanol. The inhibition of α7-mediated currents by coapplication of anandamide and ethanol was not altered by phenylmethylsulfonyl fluoride, an inhibitor of anandamide hydrolyzing enzyme, or N-(4-hydroxyphenyl)-arachidonylamide, an anandamide transport inhibitor. Analysis of oocytes by matrix-assisted laser desorption/ionization technique indicated that ethanol treatment did not alter the lipid profile of oocytes, and there is negligible, if any, anandamide present in these cells. Results of studies with chimeric α7-nACh-5-HT3 receptors comprised of the amino-terminal domain of the α7-nACh receptor and the transmembrane and carboxyl-terminal domains of 5-HT3 receptors suggest that although ethanol inhibition of the α7- nACh receptor is likely to involve the N-terminal region of the receptor, the site of action for anandamide is located in the transmembrane and carboxyl-terminal domains of the receptors. These data indicate that endocannabinoids and ethanol potentiate each other's inhibitory effects on α7-nACh receptor function through distinct regions of the receptor.