<p>The prototypic muscle-type nicotinic acetylcholine receptor (nAChR) from <i>Torpedo</i> displays exquisite functional sensitivity to its lipid environment. A defining feature of lipid-nAChR interactions is that in the absence of both neutral and anionic lipids, the nAChR adopts a conformation that binds agonist, but does not undergo agonist-induced conformational transitions—the so-called lipid-dependent uncoupled state. Here, we review the evidence supporting the existence of this non-canonical lipid-dependent uncoupled conformation. We highlight structural and functional measurements that shed light on the mechanisms by which lipids influence the activity of the nAChR, and other pentameric ligand-gated ion channels, leading to a plausible model for lipid-dependent uncoupling. Finally, we describe new structural and molecular dynamics simulation data showing the existence of both cholesterol and anionic lipid binding sites on the nAChR and highlight current research aimed at understanding whether lipid-binding to these sites allosterically influences the ability of the nAChR to undergo agonist-induced conformational transitions.</p>