The 3D structure of a complex of the anti‐Alzheimer drug galanthamine with Torpedo californica acetylcholinesterase is reported. Galanthamine, a tertiary alkaloid extracted from several species of Amarylidacae, is so far the only drug that shows a dual activity, being both an acetylcholinesterase inhibitor and an allosteric potentiator of the nicotinic response induced by acetylcholine and competitive agonists. The X‐ray structure, at 2.5Å resolution, shows an unexpected orientation of the ligand within the active site, as well as unusual protein–ligand interactions. The inhibitor binds at the base of the active site gorge, interacting with both the acyl‐binding pocket and the principal quaternary ammonium‐binding site. However, the tertiary amine group of galanthamine does not directly interact with Trp84. A docking study using the program AUTODOCK correctly predicts the orientation of galanthamine in the active site. The docked lowest‐energy structure has a root mean square deviation of 0.5Å with respect to the corresponding crystal structure of the complex. The observed binding mode explains the affinities of a series of structural analogs of galanthamine and provides a rational basis for structure‐based drug design of synthetic derivatives with improved pharmacological properties. Proteins 2001;42:182–191. © 2000 Wiley‐Liss, Inc.