Anionic lipids and cholesterols (CHOL) are critical to the function of nicotinic acetylcholine receptors (nAChR). We investigated their interactions with an open- and closed-channel alpha 4 beta 2 nAChR by over 10 ns molecular dynamics simulations in a ternary lipid mixture of 1-palmitoyl-2-oleoyl phosphatidylcholine (POPC), 1-palmitoyl-2-oleoyl phosphatidic acid (POPA), and CHOL with a ratio of 3:1:1 (Haddadian et al., J. Phys. Chem. B 2008, 112, 13981). On average there were 65 and 74 interfacial lipids around the closed- and open-channel alpha 4 beta 2 nAChR, respectively, in the equilibrated simulation systems. In the open-channel system, 42% of the interfacial POPA had acyl chains partially inserted into intra- or intersubunit cavities, as compared to only 7% in the closed-channel alpha 4 beta 2. No CHOL was found in cavities within single subunits, though some CHOL infiltrated into the gaps between subunits. Because of its smaller headgroup, POPA could access some nonannular sites where POPC could not easily reach due to steric exclusion. Furthermore, POPA acted not only as an acceptor for hydrogen bonding (H bonding) as POPC did, but also as a donor through its hydroxyl group for H bonding with the backbone of the protein. The charged headgroup of POPA allowed the lipid to form stable salt bridges with conserved Arg and Lys residues at the interfaces of the transmembrane (TM) and extracellular (EC) or intracellular (IC) domains of the alpha 4 beta 2. A higher number of salt bridges and hydrogen bonds (H bonds) between POPA and the alpha 4 beta 2 nAChR were found in the open system than in the closed system, suggesting a potential role of POPA in the equilibrium between different channel states. Most interfacial POPA molecules showed lower order parameters than the bulk POPA due to the mixed effect of gauche defects, hydrophobic mismatch, and the lipid orientations near the magic angle. These unique properties enable the interfacial POPA to achieve what POPC cannot with regard to specific interactions with the protein, thereby making POPA essential for the function of nAChR.