Agrin and its receptor MuSK are required for the formation of the postsynaptic apparatus at the neuromuscular junction (NMJ). In the current model the local deposition of agrin by the nerve and the resulting local activation of MuSK are responsible for creating and maintaining the postsynaptic apparatus including clusters of acetylcholine receptors (AChRs). Concomitantly, the release of acetylcholine (ACh) and the resulting depolarization disperses those postsynaptic structures that are not apposed by the nerve and thus not stabilized by agrin-MuSK signaling. Here we show that a miniaturized form of agrin, consisting of the laminin-binding and MuSK-activating domains, is sufficient to fully restore NMJs in agrin mutant mice when expressed by developing muscle. Although miniagrin is expressed uniformly throughout muscle fibers and induces ectopic AChR clusters, the size and the number of those AChR clusters contacted by the motor nerve increase during development. We provide experimental evidence that this is due to ACh, because the AChR agonist carbachol stabilizes AChR clusters in organotypic cultures of embryonic diaphragms. In summary, our results show that agrin function in NMJ development requires only two small domains, and that this function does not depend on the local deposition of agrin at synapses. Finally, they suggest a novel local function of ACh in stabilizing postsynaptic structures.