Genetics, genomics and electrophysiology are transforming our understanding of the nicotinic acetylcholine receptors (nAChRs). Caenorhabditis elegans contains the largest known family of nAChR subunit genes (27 members), while Drosophila melanogaster contains an exclusively neuronal nAChR gene family (10 members). In C. elegans, several genetic screens have enabled the identification of nAChR subunits, along with novel proteins that act upstream and downstream of functional nAChRs. The C. elegans genome project has identified many new candidate nAChR subunits and the calculated electrostatic potential energy profiles for the M2 channel-lining regions predict considerable functional diversity. The respective roles of subunits are under investigation using forward and reverse genetics. Electrophysiological and reporter gene studies have demonstrated roles for particular subunits in levamisole-sensitive muscle nAChRs and a role for nAChRs in pharyngeal pumping. Recombinant homomeric and heteromeric C. elegans nAChRs have been expressed in Xenopus laevis oocytes. In D. melanogaster, three new nAChR a subunits have been cloned, one of which shows multiple variant transcripts arising from alternative splicing and A-to-I pre-mRNA editing. Thus, studies on the genetic model organisms C. elegans and D. melanogaster have revealed different routes to generating molecular and functional diversity in the nAChR gene family and are providing new insights into the in vivo functions of individual family members.