The Erythrina alkaloids erysodine and dihydro-beta-erythroidine (DH beta E) are potent and selective competitive inhibitors of alpha 4 beta 2 nicotinic acetylcholine receptors (nAChRs), but little is known about the molecular determinants of the sensitivity of this receptor subtype to inhibition by this class of antagonists. We addressed this issue by examining the effects of DH beta E and a range of aromatic Erythrina alkaloids on [H-3]cytisine binding and receptor function in conjunction with homology models of the alpha 4 beta 2 nAChR, mutagenesis, and functional assays. The lactone group of DH beta E and a hydroxyl group at position C-16 in aromatic Erythrina alkaloids were identified as major determinants of potency, which was decreased when the conserved residue Tyr126 in loop A of the alpha 4 subunit was substituted by alanine. Sensitivity to inhibition was also decreased by substituting the conserved aromatic residues alpha 4Trp182 (loop B), alpha 4Tyr230 (loop C), and beta 2Trp82 (loop D) and the nonconserved beta 2Thr84; however, only alpha 4Trp182 was predicted to contact bound antagonist, suggesting alpha 4Tyr230, beta 2Trp82, and beta 2Thr84 contribute allosterically to the closed state elicited by bound antagonist. In addition, homology modeling predicted strong ionic interactions between the ammonium center of the Erythrina alkaloids and beta 2Asp196, leading to the uncapping of loop C. Consistent with this, beta 2D196A abolished sensitivity to inhibition by DH beta E or erysodine but not by epierythratidine, which is not predicted to form ionic bonds with beta 2Asp196. This residue is not conserved in subunits that comprise nAChRs with low sensitivity to inhibition by DH beta E or erysodine, which highlights beta 2Asp196 as a major determinant of the receptor selectivity of Erythrina alkaloids.