Pulmonary neuroepithelial bodies (NEB) are presumed airway chemoreceptors involved in respiratory control, especially in the neonate. Nicotine is known to affect both lung development and control of breathing. We report expression of functional nicotinic acetylcholine receptors (nAChR) in NEB cells of neonatal hamster lung using a combination of morphological and electrophysiological techniques. Nonisotopic in situ hybridization method was used to localize mRNA for the β2-subunit of nAChR in NEB cells. Double-label immunofluorescence confirmed expression of α4-, α7-, and β2-subunits of nAChR in NEB cells. The electrophysiological characteristics of nAChR in NEB cells were studied using the whole cell patch-clamp technique on fresh lung slices. Application of nicotine (∼0.1-100 μM) evoked inward currents that were concentration dependent (EC50 = 3.8 μM; Hill coefficient = 1.1). ACh (100 μM) and nicotine (50 μM) produced two types of currents. In most NEB cells, nicotine-induced currents had a single desensitizing component that was blocked by mecamylamine (50 μM) and dihydro-β-erythroidine (50 μM). In some NEB cells, nicotine-induced current had two components, with fast- and slow-desensitizing kinetics. The fast component was selectively blocked by methyllcaconitine (MLA, 10 nM), whereas both components were inhibited by mecamylamine. Choline (0.5 mM) also induced an inward current that was abolished by 10 nM MLA. These studies suggest that NEB cells in neonatal hamster lung express functional heteromeric α3β2, α4β2, and α7 nAChR and that cholinergic mechanisms could modulate NEB chemoreceptor function under normal and pathological conditions.