The binding sites of Cys-loop receptors are formed from at least six loops (A−F). Here we have used mutagenesis, radioligand binding, voltage clamp electrophysiology, and homology modeling to probe the role of two residues in loop A of the 5-HT3 receptor: Asn128 and Glu129. The data show that substitution of Asn128, with a range of alternative natural and unnatural amino acids, changed the EC50 (from ∼10-fold more potent to ∼10-fold less potent than that of the wild type), increased the maximal peak current for mCPBG compared to 5-HT (Rmax) 2−19-fold, and decreased nH, indicating this residue is involved in receptor gating; we propose Asn128 faces away from the binding pocket and plays a role in facilitating transitions between conformational states. Substitutions of Glu129 resulted in functional receptors only when the residue could accept a hydrogen bond, but with both these and other substitutions, no [3H]granisetron binding could be detected, indicating a role in ligand binding. We propose that Glu129 faces into the binding pocket, where, through its ability to hydrogen bond, it plays a critical role in ligand binding. Thus, the data support a modified model of the 5-HT3 receptor binding site and show that loop A plays a critical role in both the ligand binding and function of this receptor.