Substance P (SP) is present in avian sympathetic ganglia and accelerates the decay rate of acetylcholine (ACh)-evoked macroscopic currents in sympathetic neurons. We demonstrate here that SP modulates ACh-elicited single channels in a manner consistent with an enhancement of ACh receptor (AChR) desensitization. Furthermore, since AChR channel function was monitored in cell-attached patches with SP applied to the extra-patch membrane, the peptide must act via a second messenger mechanism. SP specifically decreases the net ACh-activated single-channel current across the patch membrane by decreasing both channel opening frequency and mean open time kinetics. These experiments demonstrate that a peptide can modulate neuronal AChR function by a second messenger mechanism.