Cholesterol-rich lipid rafts act as signaling microdomains and can regulate receptor function. We have shown in HEK293 cells recombinant P2X1-4 receptors (ATP-gated ion channels) are expressed in lipid rafts. Localization to flotillin-rich lipid rafts was reduced by the detergent Triton X-100. This sensitivity to Triton X-100 was concentration- and subunit-dependent, demonstrating differential association of P2X1-4 receptors with lipid rafts. The importance of raft association to ATP-evoked P2X receptor responses was determined in patch clamp studies. The cholesterol-depleting agents methyl-β-cyclodextrin or filipin disrupt lipid rafts and reduced P2X1 receptor currents by >90%. In contrast, ATP-evoked P2X2-4 receptor currents were unaffected by lipid raft disruption. To determine the molecular basis of cholesterol sensitivity, we generated chimeric receptors replacing portions of the cholesterol-sensitive P2X1 receptor with the corresponding region from the insensitive P2X2 receptor. These chimeras identified the importance of the intracellular amino-terminal region between the conserved protein kinase C site and the first transmembrane segment for the sensitivity to cholesterol depletion. Mutation of any of the variant residues between P2X1 and P2X2 receptors in this region in the P2X1 receptor (residues 20-23 and 27-29) to cysteine removed cholesterol sensitivity. Cholesterol depletion did not change the ATP sensitivity or cell surface expression of P2X1 receptors. This suggests that cholesterol is normally needed to facilitate the opening/gating of ATP-bound P2X1 receptor channels, and mutations in the pre-first transmembrane segment region remove this requirement.