The presence and physiological significance of acetylcholine (ACh) receptors on motor nerve terminals was examined at the rat diaphragm neuromuscular junction. Intracellular recording techniques were used to monitor end-plate potentials (EPP), miniature end-plate potentials (MEPP), and resting potentials of the muscle fibers. Muscle action potentials were blocked by the cut-muscle technique. Quantal release was determined by the ratio EPP/MEPP, after correcting for nonlinear summation. Blockade of acetylcholinesterase with eserine and neostigmine was tested to determine the influence of residual ACh on transmitter release. Partial blockade of ACh receptors with curare was examined to further clarify the role of these presynaptic receptors. The experiments demonstrate that residual ACh inhibits transmitter release and that blockade of ACh receptors enhances transmitter release. It is concluded that presynaptic ACh receptors exist and that they serve an important physiological function. It is suggested that the presynaptic ACh receptors normally serve to limit transmitter release in a negative feedback pathway.