Some evidence suggests that retinal pigment epithelium (RPE) can express nicotinic acetylcholine receptors (nAChRs) as described for other epithelial cells, where nAChRs have been involved in processes such as cell development, cell death, cell migration, and angiogenesis. This study is designed to determine the expression and activity of α7 nAChRs in RPE cells. Reverse transcriptase (RT)-PCR was performed to test the expression of nicotinic α7 subunit in bovine RPE cells. Protein expression was determined by Western blot and by immunocytochemistry. Expression of nicotinic α7 subunits was also analyzed in cryostat sections of albino rat retina. Changes in protein expression were tested under hypoxic conditions. Functional nAChRs were studied by examining the Ca2+ transients elicited by nicotine and acetylcholine stimulation in fura-2–loaded cells. Expression of endogenous modulators of nAChRs was analyzed by RT-PCR and Western blot in retina and RPE. Cultured bovine RPE cells expressed nicotinic receptors containing α7 subunit. RT-PCR amplified the expected specific α7 fragment. Western blotting showed expression at the protein level, with a specific band being found at 57 kDa in both cultured and freshly isolated RPE cells. Expression of nAChRs was confirmed for cultured cells by immunofluorescence. Immunohistochemistry confirmed α7 receptor expression in rat RPE retina. α7 receptor expression was down-regulated by long-term hypoxia. A small subpopulation of RPE cultured cells showed functional nAChRs, as evidenced by the selective response elicited by nicotine and acetylcholine stimulation. Expression of the endogenous nicotinic receptors’ modulator lynx1 was confirmed in bovine retina and RPE, and expression of lynx1 and other endogenous nicotinic receptor modulators (SLURP1 and RGD1308195) were also confirmed in rat retina. These results suggest that nAChRs could have a significant role in RPE, which may not be related to the traditional role in nerve transmission but could more likely be related to the nonneuronal cholinergic system in the eye.