Genomic studies have identified a D398N variation in the α5 subunit of nicotinic acetylcholine receptors (AChRs) that increases risk of nicotine dependence and lung cancer. (α4β2)₂α5 AChRs are a significant brain presynaptic subtype in brain. Their high sensitivity to activation by nicotine and high Ca²+ permeability give them substantial functional impact. α3β4* and α3β2* AChRs are predominant postsynaptic AChRs in the autonomic nervous system, but rare in brain. The amino acid 398 of α5 is located in the large cytoplasmic domain near the amphipathic α helix preceding the M4 transmembrane domain. These helices have been shown to influence AChR conductance by forming portals to the central channel. We report that α5 Asn 398 lowers Ca²+ permeability and increases short-term desensitization in (α4β2)₂α5 but not in (α3β4)₂α5 or (α3β2)₂α5 AChRs. This suggests that a positive allosteric modulator would augment nicotine replacement therapy for those with this risk variant. α5 D398N variation does not alter sensitivity to activation. The high sensitivity to activation and desensitization of (α4β2)₂α5 AChRs by nicotine results in a narrow concentration range in which activation and desensitization curves overlap. This region centers on 0.2 μM nicotine, a concentration typically sustained in smokers. This concentration would desensitize 60% of these AChRs and permit smoldering activation of the remainder. The low sensitivity to activation and desensitization of (α3β4)₂α5 AChRs by nicotine results in a broad region of overlap centered near 10 μM. Thus, at the nicotine concentrations in smokers, negligible activation or desensitization of this subtype would occur.