The nic1b107 (nic1) mutation blocks expression of both functional and clustered acetylcholine receptors (AChRs) in zebrafish muscle. Normally, signaling between motoneurons and muscles regulates AChR clustering. To learn if signaling is affected and to identify the primary cellular target of the nic1 mutation, we made mosaic embryos by transplanting motoneurons and muscle precursors from wild-type to mutant embryos. Genotypically mutant muscle cells fail to cluster AChRs even when contacted by wild-type motoneurons, whereas genotypically mutant motoneurons induce AChR clustering on wild-type muscle cells. Moreover, mutant muscle cells fail to cluster AChRs under culture conditions that induce AChR clustering on wild-type cells. We conclude that the nic1 mutation acts autonomously in muscle cells rather than by affecting signaling between motoneurons and muscle. The wild-type nic1 gene is necessary in muscle for expression and clustering of AChRs.