Drug modulation of the α7 acetylcholine receptor has emerged as a therapeutic strategy for neurological, neurodegenerative, and inflammatory disorders. α7 is a homo-pentamer containing topographically distinct sites for agonists, calcium, and drug modulators with each type of site present in five copies. However, functional relationships between agonist, calcium, and drug modulator sites remain poorly understood. To investigate these relationships, we manipulated the number of agonist binding sites, and monitored potentiation of ACh-elicited single-channel currents through α7 receptors by PNU-120596 (PNU) both in the presence and absence of calcium. When ACh is present alone, it elicits brief, sub-millisecond channel openings, however when ACh is present with PNU it elicits long clusters of potentiated openings. In receptors harboring five agonist binding sites, PNU potentiates regardless of the presence or absence of calcium, whereas in receptors harboring one agonist binding site, PNU potentiates in the presence but not the absence of calcium. By varying the numbers of agonist and calcium binding sites we show that PNU potentiation of α7 depends on a balance between agonist occupancy of the orthosteric sites and calcium occupancy of the allosteric sites. The findings suggest that in the local cellular environment, fluctuations in the concentrations of neurotransmitter and calcium may alter this balance and modulate the ability of PNU to potentiate α7.