Nicotinic acetylcholine receptors (nAChRs) that contain an alpha7 subunit are widely distributed in neuronal and nonneuronal tissue. These receptors are implicated in the release of neurotransmitters such as glutamate and in functions ranging from thought processing to inflammation. Currently available ligands for alpha7 nAChRs have substantial affinity for one or more other nAChR subtypes, including those with an alpha1, alpha3, alpha6, and/or alpha9 subunit. An alpha-conotoxin gene was cloned from Conus arenatus. Predicted peptides were synthesized and found to potently block alpha3-, alpha6-, and alpha7-containing nAChRs. Structure-activity information regarding conotoxins from distantly related Conus species was employed to modify the C. arenatus derived toxin into a novel, highly selective alpha7 nAChR antagonist. This ligand, alpha-CtxArIB[V11L,V16D], has low nanomolar affinity for rat alpha7 homomers expressed in Xenopus laevis oocytes, and antagonism is slowly reversible. Kinetic analysis provided insight into the mechanism of antagonism. alpha-CtxArIB interacts with five ligand binding sites per alpha7 receptor, and occupation of a single site is sufficient to block function. The peptide was also shown to be highly selective in competition binding assays in rat brain membranes. alpha-CtxArIB[V11L,V16D] is the most selective ligand yet reported for alpha7 nAChRs.