Extensive molecular docking, molecular dynamics simulations, and binding free energy calculations have been performed to understand how alpha7-specific agonists of nicotinic acetylcholine receptor (nAChR), including AR-R17779 (1), GTS-21 (4), and 4-OH-GTS-21 (5), interact with the alpha7 receptor, leading to important new insights into the receptor-agonist binding. In particular, the cationic head of 4 and 5 has favorable hydrogen bonding and cation-pi interactions with residue Trp149. The computational results have also led us to better understand the roles of Gln117 and other residues in the receptor binding with agonists. The computational predictions are supported by data obtained from wet experimental tests. The new insights into the binding and structure-activity relationship obtained from this study should be valuable for future rational design of more potent and selective agonists of the alpha7 receptor.