The mechanism of agonist interactions with Cys-loop ligand-gated ion channels has been studied using the acetylcholine-binding protein (AChBP) from Lymnaea stagnalis as a model protein and acetylcholine, nicotine, epibatidine, and a series of substituted quinuclidines as ligands. A biosensor-based assay for direct interaction studies of immobilized AChBP and small molecule ligands was developed. It allowed the characterization of the interaction kinetics of the ligands and the structural dynamics of the protein. The interactions with AChBP were very sensitive to variations in the experimental conditions and showed several types of complexities. These could be resolved into two types of ligand-induced secondary effects with different kinetics, representing fast and slow conformational changes. The data could be rationalized in a mechanistic model, and a structural interpretation of the interaction was obtained by molecular modeling involving induced fit and loop flexibility simulations. The data suggest that AChBP exhibits ligand-induced structural dynamics, as expected for the ligand gating mechanism of Cys-loop receptors. It shows that the formation of the initial encounter complex between AChBP and ligands is very rapid, in accordance with the functional characteristics required of neurotransmission. These developed procedures will enable further exploration of the mechanism of Cys-loop receptor function and the identification of specific ligands suitable for pharmacological use. © 2010 American Chemical Society.