Ligand-gated ion channels (LGICs) are cell surface proteins that play an important role in fast synaptic transmission and in the modulation of cellular activity. Due to their intrinsic properties, LGICs respond to neurotransmitters and other effectors (e.g. pH) and transduce the binding of a ligand into an electrical current on a microsecond timescale. Following activation, LGICs open allowing an ion flux across the cell membrane. Depending upon the charge and concentration of ions, the flux can cause a depolarization or hyperpolarization, thus modulating excitability of the cell. While our understanding of LGICs has significantly progressed during the past decade, many properties of these proteins are still poorly understood, in particular their modulation by allosteric effectors. LGICs are often thought as a simple on-off switches. However, a closer look at these receptors reveals a complex behavior and a wide repertoire of subtle modulation by intrinsic and extrinsic factors. From a physiological point of view, this modulation can be seen as an additional level of complexity in the cell signaling process. Here we review the allosteric modulation of LGICs in light of the latest findings and discuss the suitability of this approach to the design of new therapeutic molecules.