Each subunit of the nicotinic acetylcholine receptor (AChR) contains two conserved cysteine residues, which are known to form a disulfide bond, in the N-terminal extracellular domain. The role of this retained structural feature in the biogenesis of the AChR was studied by expressing site-directed mutant alpha and beta subunits together with other normal subunits from Torpedo californica AChR in Xenopus oocytes. Mutation of the cysteines at position 128 or 142 in the alpha subunit, or in the beta subunit, did not prevent subunit assembly. All Cys128 and Cys142 mutants of the alpha and beta subunits were able to associate with coexpressed other normal subunits, although associational efficiency of the mutant alpha subunits with the delta subunit was reduced. Functional studies of the mutant AChR complexes showed that the mutations in the alpha subunit abolished detectable 125I-alpha-bungarotoxin (alpha-BuTX) binding in whole oocytes, whereas the mutations in the beta subunit resulted in decreased total binding of 125I-alpha-BuTX and no detectable surface 125I-alpha-BuTX binding. Additionally, all mutant subunits, when co-expressed with the other normal subunits in oocytes, produced small acetylcholine-activated membrane currents, suggesting incorporation of only small numbers of functional mutant AChRs into the plasma membrane. The functional acetylcholine-gated ion channel formed with mutant alpha subunits, but not mutant beta subunits, could not be blocked by alpha-BuTX. Thus, a disulfide bond between Cys128 and Cys142 of the AChR alpha or beta subunits is not needed for acetylcholine-binding. However, this disulfide bond on the alpha subunit is necessary for formation of the alpha-BuTX-binding site. These results also suggest that the most significant effect caused by disrupting the conserved disulfide loop structure is intracellular retention of most of the assembled AChR complexes.