Nicotine, a partial agonist, has a very low efficacy at the nicotinic acetylcholine receptor from Torpedo, but it is not clear whether this is because it is intrinsically poor at opening the ion channel or because, at concentrations that open the channel, it is also capable of blocking it. In this study, we exploited the action of ethanol, which increases the apparent affinity of cholinergic agonists for channel activation, and demonstrated that the weak action of nicotine is consistent with simultaneous activation and inhibition of the receptor. The presence of ethanol increased the efficacy of nicotine, producing an increase in the initial rate of cation efflux from acetylcholine receptor-rich membrane vesicles, as measured by a rapid quench-flow tracer ion assay. The initial rate of efflux increased with ethanol concentration until, in the presence of 1.5 M ethanol, the response to nicotine was indistinguishable from that of the full agonist carbamylcholine. The concentration-response curves for nicotine were bell-shaped, showing activation at low concentrations and inhibition at higher concentrations. Increasing concentrations of ethanol increased the apparent affinity of nicotine for channel activation and decreased its apparent affinity for channel inhibition. These actions broadened the bell-shaped curve, increasing the maximum response until it was equivalent to that of a full agonist. The apparent affinity of nicotine for its inhibitory site, derived from the aforementioned data, agreed with that determined independently by measuring the inhibition by nicotine of initial rates of ion efflux in response to acetylcholine. A value for the apparent affinity of nicotine for channel opening was estimated from the dependence of this parameter on ethanol concentration. When combined, these two parameters predicted the bell-shaped concentration-response curve for the action of nicotine. The results presented in this study are consistent with the notion that the efficacy of nicotine is determined by its relative affinities for channel activation and channel inhibition, but they do not rule out other contributions.