Allosteric modulation of membrane receptors is a widespread mechanism by which endogenous and exogenous agents regulate receptor function. For example, several members of the nicotinic receptor family are modulated by physiological concentrations of extracellular calcium ions. In this paper, we examined conformational changes underlying this modulation and compare these with changes evoked by ACh. Two sets of residues in the alpha 7 acetylcholine receptor extracellular domain were mutated to cysteine and analyzed by measuring the rates of modification by the thiol-specific reagent 2-aminoethylmethane thiosulfonate. Using Ba2+ as a surrogate for Ca2+, we found a divalent-dependent decrease the modification rates of cysteine substitutions at M37 and M40, residues at which rates were also slowed by ACh. In contrast, Ba2+ had no significant effect at N52C, a residue where ACh increased the rate of modification. Thus divalent modulators cause some but not all of the conformational effects elicited by agonist. Cysteine substitution of either of two glutamates (E44 or E172), thought to participate in the divalent cation binding site, caused a loss of allosteric modulation, yet Ba2+ still had a significant effect on modification rates of these residues. In addition, the effect of Ba2+ at these residues did not appear to be due to direct occlusion. Our data demonstrate that modulation by divalent cations involves substantial conformational changes in the receptor extracellular domain. Our evidence also suggests the modulation occurs via a binding site distinct from one which includes either (or both) of the conserved glutamates at E44 or E172.