Venom peptide toxins such as conotoxins play a critical role in the characterization of nicotinic acetylcholine receptor (nAChR) structure and function and have potential as nervous system therapeutics as well. However, the lack of solved structures of conotoxins bound to nAChRs and the large size of these peptides are barriers to their computational docking and design. We addressed these challenges in the context of the α4β2 nAChR, a widespread ligand-gated ion channel in the brain and a target for nicotine addiction therapy, and the 19-residue conotoxin α-GID that antagonizes it. We developed a docking algorithm, ToxDock, which used ensemble-docking and extensive conformational sampling to dock α-GID and its analogs to an α4β2 nAChR homology model. Experimental testing demonstrated that a virtual screen with ToxDock correctly identified three bioactive α-GID mutants (α-GID[A10V], α-GID[V13I], and α-GID[V13Y]) and one inactive variant (α-GID[A10Q]). Two mutants, α-GID[A10V] and α-GID[V13Y], had substantially reduced potency at the human α7 nAChR relative to α-GID, a desirable feature for α-GID analogs. The general usefulness of the docking algorithm was highlighted by redocking of peptide toxins to two ion channels and a binding protein in which the peptide toxins successfully reverted back to near-native crystallographic poses after being perturbed. Our results demonstrate that ToxDock can overcome two fundamental challenges of docking large toxin peptides to ion channel homology models, as exemplified by the α-GID:α4β2 nAChR complex, and is extendable to other toxin peptides and ion channels. ToxDock is freely available at rosie.rosettacommons.org/tox_dock.