The lipid requirements of the Torpedo californica nicotinic acetylcholine receptor (nAChR) were assessed by reconstituting purified receptors into lipid vesicles of defined composition and by using photolabeling with 3-trifluoromethyl-3-(m-[125I]iodophenyl)diazirine ([ 125I]TID) to determine functionality. Earlier studies demonstrated that nAChRs reconstituted into membranes containing phosphatidylcholine (PC), the anionic lipid phosphatidic acid (PA), and cholesterol (CH) are particularly effective at stabilizing the nAChR in the resting (closed) state that is capable of undergoing agonist-induced conformational transitions (i.e., functionality). The present studies demonstrate that (1) there is no obligatory requirement for PC, (2) increasing the CH content serves to increase the degree to which nAChRs are stabilized in the resting state, and this effect saturates at ∼35 mol % (molar lipid percentage), and (3) the effect of increasing levels of PA saturates at ∼12 mol % and in the absence of PA nAChRs are stabilized in the desensitized state (i.e., nonfunctional). Native Torpedo membranes contain ∼35 mol % CH but less than 1 mol % PA, suggesting that other anionic lipids may substitute for PA. We report that (1) phosphatidylserine (PS) and phosphatidylinositol (PI), anionic lipids that are abundant in native Torpedo membranes, also stabilize the receptor in the resting state although with reduced efficacy (∼50-60%) compared to PA, and (2) for nAChRs reconstituted into PA/CH membranes at different lipid-protein molar ratios, receptor functionality decreases rapidly below ∼65 lipids per receptor. Collectively, these results are consistent with a functional requirement of a single shell of lipids surrounding the nAChR and specific anionic lipid- and sterol (CH)-protein interactions.