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Drug discovery requires a simple, rapid, and cost-effective method for the early identification of novel leads and elimination of poor candidates. Here we present an experimental design that fulfils these criteria, using a ligandgated ion channel expressed in a mammalian cell line, whose function can be probed using a voltage-sensitive dye. The experimental design is novel, as it uses the same screen to identify hit fragments and to characterize them as agonists or antagonists. The results were independently validated using radioligand binding, although the new technique has several advantages over radioligand methods. A number of novel high-affinity ligands were found. The method is broadly applicable to a wide range of receptor types including ligand-gated ion channels (LGICs), voltage-gated ion channels (VGICs), and G protein–coupled receptors (GPCRs), all of which are important drug targets.