Acetylcholine receptors mediate electrical signaling between nerve and muscle by opening and closing a transmembrane ion conductive pore. Molecular and Brownian dynamics simulations are used to shed light on the location and mechanism of the channel gate. Four separate 5 ns molecular dynamics simulations are carried out on the imaged structure of the channel, a hypothetical open structure with a slightly wider pore and a mutant structure in which a central ring of hydrophobic residues is replaced by polar groups. Water is found to partially evacuate the pore during molecular simulations of the imaged structure, whereas ions face a large energy barrier and do not conduct through the channel in Brownian dynamics simulations. The pore appears to be in a closed configuration despite containing an unobstructed pathway across the membrane as a series of hydrophobic residues in the center of the channel provide an unfavorable home to water and ions. When the channel is widened slightly, water floods into the channel and ions conduct at a rate comparable to the currents measured experimentally in open channels. The pore remains permeable to ions provided the extracellular end of the pore-lining helix is restrained near the putative open configuration to mimic the presence of the ligand binding domain. Replacing some of the hydrophobic residues with polar ones decreases the barrier for ion permeation but does not result in significant currents. The channel is posited to utilize an energy efficient gating mechanism in which only minor conformational changes of the hydrophobic region of the pore are required to create macroscopic changes in conductance.