The nicotinic acetylcholine receptor (nAChR) is an important therapeutic target for a wide range of pathophysiological conditions, for which rational drug designs often require receptor structures at atomic resolution. Recent proof-of-concept studies demonstrated a water-solubilization approach to structure determination of membrane proteins by NMR (Slovic et al., PNAS, 101: 1828–1833, 2004; Ma et al., PNAS, 105: 16537–42, 2008). We report here the computational design and experimental characterization of WSA, a water-soluble protein with ~ 83% sequence identity to the transmembrane (TM) domain of the nAChR α1 subunit. Although the design was based on a low-resolution structural template, the resulting high-resolution NMR structure agrees remarkably well with the recent crystal structure of the TM domains of the bacterial Gloeobacter violaceuspentameric ligand-gated ion channel (GLIC), demonstrating the robustness and general applicability of the approach. NMR T2 dispersion measurements showed that the TM2 domain of the designed protein was dynamic, undergoing conformational exchange on the NMR timescale. Photoaffinity labeling with isoflurane and propofol photolabels identified a common binding site in the immediate proximity of the anesthetic binding site found in the crystal structure of the anesthetic-GLIC complex. Our results illustrate the usefulness of high-resolution NMR analyses of water-solubilized channel proteins for the discovery of potential drug binding sites.