Elucidation of the molecular mechanisms that govern ligand-receptor recognition is essential to the rational design of specific pharmacological reagents. Whereas often the receptor and its binding site are the target of investigation, study of the ligand in its free and bound state can also reveal important information regarding this recognition process. Nuclear magnetic resonance (NMR) spectroscopy can be extremely useful for such studies. In this review, we discuss the attributes of NMR in the study of ligand receptor interactions. The cholinergic receptor and its binding to the neurotransmitter, acetylcholine, and cholinergic antagonists serve as a model system, illustrating the power of ligand analysis by NMR. The results discussed prove that the region of residues alpha 180-205 of the nicotinic acetylcholine receptor are an essential component of the cholinergic binding site and that ligand binding involves a positively charged hydrophobic motif.