The ability of the Torpedo nicotinic acetylcholine receptor (nAChR) to undergo agonist-induced conformational transitions requires the presence of cholesterol and/or anionic lipids. Here we use recently solved structures along with multiscale molecular dynamics simulations to examine lipid binding to the nAChR in bilayers that have defined effects on nAChR function. We examine how phosphatidic acid and cholesterol, lipids that support conformational transitions, individually compete for binding with phosphatidylcholine, a lipid that does not. We also examine how the two lipids work synergistically to stabilize an agonist-responsive nAChR. We identify rapidly exchanging lipid binding sites, including both phospholipid sites with a high affinity for phosphatidic acid and promiscuous cholesterol binding sites in the grooves between adjacent transmembrane α-helices. A high affinity cholesterol site is confirmed in the inner leaflet framed by a key tryptophan residue on the MX α-helix. Our data provide insight into the dynamic nature of lipid-nAChR interactions and set the stage for a detailed understanding of the mechanisms by which lipids facilitate nAChR function at the neuromuscular junction.