α7 Neuronal nicotinic acetylcholine receptors are one of two major classes of receptors responsible for cholinergic neurotransmission in the central nervous system. The existence of α7 neuronal nAChRs in different regions of the nervous system suggests their involvement in certain essential physiological functions as well as in disorders such as Alzheimer’s disease (AD), drug dependence, and depression. This project was aimed toward the discovery and development of small–molecule arylguanidines that modulate α7 nAChR function with improved subtype-selectivity through an allosteric approach. Identifying the required structural features of these small molecules allowed optimization of their negative allosteric modulator (NAM) actions at α7 neuronal nAChRs. MD-354 (3-chlorophenylguanidine) was the first small–molecule NAM at α7 nAChRs; however, it also binds at 5-HT3 receptors. The N-methyl analog of MD-354 appeared to be more selective toward α7 nAChRs than 5-HT3 receptors. Comparative studies using two series of novel compounds based on MD-354 and its N-methyl analog explored the aryl 3-position and investigated whether or not the MD-354 series and the N-methyl series bind in the same manner. Biological potencies of the MD-354 series and the N-methyl series of compounds, obtained from electrophysiological assays with Xenopus laevis oocytes expressing human α7 nAChRs in two-electrode voltage-clamp assays, showed that N-(3-iodophenyl)-N- methylguanidine (28) is the most potent analog at α7 nAChRs. Our comparative study and Hansch analyses indicated different binding modes of the two series. In addition, we investigated: i) the length/size of the aliphatic side chain at the anilinic nitrogen, ii) the effect of alkylating the guanidine nitrogen atoms, and iii) the necessity of the presence of these nitrogen atoms for the inhibitory effects of arylguanidines at α7 nAChRs. In efforts to explain the varied functional activity of these arylguanidines, homology models of the extracellular domain and the transmembrane domain of human α7 nAChRs were developed, allosteric sites identified, and docking studies and hydropathic analysis conducted. The 3D quantitative structure-activity relationships for our compounds were also analyzed using CoMFA. A pharmacophore for arylguanidines as α7 nAChR NAMs was identified. Together, these data should be useful for the subsequent design of novel arylguanidine analogs for their potential treatment of neurological disorders.