Bovine serum albumin (BSA) enhances nicotinic agonist-induced (86)Rb+ efflux from synaptosomal fractions of the mouse thalamus, but how it does so is not understood. The experiments reported here indicated that BSA enhancement of nicotinic acetylcholine receptor function was rapid, reversible, depended on BSA concentration, and occurred at all points of the nicotinic agonist concentration-response curve. We hypothesized that BSA-extractable compounds, such as long-chain fatty acids, were responsible for inhibiting nicotinic responses in the absence of BSA. The hypothesis was tested by applying arachidonic, linolenic, or oleic acids in the absence of BSA after an initial prewash with BSA. All three fatty acids exhibited a rapid, concentration-dependent inhibition of nicotinic-agonist stimulated ion flux. Concentration-response curves produced after 30 s of pre-treatment with arachidonic acid were similar to those seen when BSA was completely absent. The effects of pre-treatment were reversed immediately by the introduction of BSA. Furthermore, no effects of fatty acids were observed when preparations were continuously exposed to BSA or when BSA was continuously absent. These results suggest that the removal of endogenous, inhibitory compounds is largely responsible for the rapid, potentiating action of BSA at nicotinic acetylcholine receptors expressed in the mouse thalamus.