Novel effects of cholesterol (Chol) on nicotinic acetylcholine receptor (AChR) cell-surface stability, internalization and function are reported. AChRs are shown to occur in the form of submicron-sized (240-280 nm) domains that remain stable at the cell-surface membrane of CHO-K1/A5 cells over a period of hours. Acute (30 min, 37 degrees C) exposure to methyl-beta-cyclodextrin (CDx), commonly used as a diagnostic tool of endocytic mechanisms, is shown here to enhance AChR internalization kinetics in the receptor-expressing clonal cell line. This treatment drastically reduced ( approximately 50%) the number of receptor domains by accelerating the rate of endocytosis (t(1/2) decreased from 1.5-0.5 h). In addition, Chol depletion produced ion channel gain-of-function of the remaining cell-surface AChR, whereas Chol enrichment had the opposite effect. Fluorescence measurements under conditions of direct excitation of the probe Laurdan and of Förster-type resonance energy transfer (FRET) using the intrinsic protein fluorescence as donor both indicated an increase in membrane fluidity in the bulk membrane and in the immediate environment of the AChR protein upon Chol depletion. Homeostatic control of Chol content at the plasmalemma may thus modulate cell-surface organization and stability of receptor domains, and fine tune receptor channel function to temporarily compensate for acute AChR loss from the cell surface.