Pentameric ligand-gated ion channel (pLGIC) receptors exhibit desensitization, the progressive reduction in ionic flux in the prolonged presence of agonist. Despite its pathophysiological importance and the fact that it was first described over half a century ago, surprisingly little is known about the structural basis of desensitization in this receptor family. Here, we explain how desensitization is defined using functional criteria. We then review recent progress into reconciling the structural and functional basis of this phenomenon. The extracellular-transmembrane domain interface is a key locus. Activation is well known to involve conformational changes at this interface, and several lines of evidence suggest that desensitization involves a distinct conformational change here that is incompatible with activation. However, major questions remain unresolved, including the structural basis of the desensitization-induced agonist affinity increase and the mechanism of pore closure during desensitization.