One of unique features that distinguish P2X₇ receptor from the other P2X receptors is that divalent cations such as zinc potently inhibit its functional responses (North, 2002). This has been long and widely interpreted, in the case of calcium and magnesium, as ATP^4- being the efficient agonist form (Tatham et al., 1988) although not conclusively proved. There is suggestive evidence that the inhibition by divalent cations is via direct binding and allosteric modulation of the receptor (Virginio et al., 1997). To provide direct molecular evidence for the latter mechanism, this study was to aim to identify the residues mediating functional inhibition of the P2X₇ receptor by zinc. There are fourteen potential residues in the extracellular domain that are conserved among the P2X₇ but other P2X receptor subunits. Alanines were singly substituted by site-directed mutagenesis into each position of the rat P2X₇ receptor subunit. Wild-type (WT) and mutant P2X₇ receptors were expressed in human embryonic kidney (HEK) 293 cells and studied by whole cell patch-clamp technique with a holding potential of -60 mV. At WT receptor, zinc (0.1 µM to 100 µM) inhibited the currents evoked by 30 μM 2’-3’-(O )-(4-benzoyl) benzoyl ATP (BzATP) in a dose-dependent manner with an IC₅₀ value of 4.1 ± 0.6 µM and Hill coefficient (n_H) of 0.8 ± 0.1 (n = 5). Interestingly, strong rebound currents appeared when simultaneously washing zinc and BzATP, suggesting that zinc directly binds P2X₇ receptor and that zinc dissociates from P2X₇ receptor much faster than BzATP. Zinc at 30 µM inhibited all the mutants to a similar degree as the WT receptor except H62A and D197A. The inhibition at H62A and D197A was respectively 29.7 ± 3.5% (n = 7, p < 0.001, unpaired Student’s t-test) and 55.4 ± 3.4% (n = 5, p < 0.05), significantly less than that at WT receptor (88.0 ± 2.5%, n = 5). For the double mutant, H62A/D197A, there was no significant inhibition by zinc: the currents in the presence of 30 µM and 100 µM zinc were 315.3 ± 160.2 pA and 321.7 ± 161.4 pA, respectively, which were not different from the control (352.3 ± 158.9 pA, n = 5; paired Student’s t-test). In addition, the rebound currents were significantly reduced or completely abolished at D197A, H62A and H62A/D197A mutants. These results indicate that H62 and D197 are the key residues mediating the functional inhibition. Therefore the study provides clear evidence supporting that the zinc inhibition of P2X₇ receptor results primarily from direct binding and allosteric modulation instead of the long-standing assumed mechanism of reducing the effective agonist concentration by its chelating ability.