Our group has been employing short synthetic peptides, encompassing sequences from the acetylcholine receptor (AChR) alpha-subunit for the analysis of the binding site of the AChR. A 13-mer peptide mimotope, with similar structural motifs to the AChR binding region, was selected by alpha-bungarotoxin (alpha-BTX) from a phage-display peptide library. The solution structure of a complex between this library-lead peptide and alpha-BTX was solved by NMR spectroscopy. On the basis of this NMR study and on structure-function analysis of the AChR binding site, and in order to obtain peptides with higher affinity to alpha-BTX, additional peptides resulting from systematic residue replacement in the lead peptide were designed and characterized. Of these, four peptides, designated high-affinity peptides (HAPs), homologous to the binding region of the AChR, inhibited the binding of alpha-BTX to the AChR with an IC(50) of 2 nM. The solution and crystal structures of complexes of alpha-BTX with HAP were solved, demonstrating that the HAP fits snugly to alpha-BTX and adopts a beta-hairpin conformation. The X-ray structures of the bound HAP and the homologous loop of the acetylcholine binding protein (AChBP) are remarkably similar. Their superposition results in a model indicating that alpha-BTX wraps around the receptor binding-site loop and, in addition, binds tightly at the interface of two of the receptor subunits, where it inserts a finger into the ligand-binding site. Our proposed model explains the strong antagonistic activity of alpha-BTX and accommodates much of the biochemical data on the mode of interaction of alpha-BTX with the AChR.