Ly6 proteins are endogenous prototoxins found in most animals. They show striking structural and functional parallels to snake α-neurotoxins, including regulation of ion channels and cholinergic signaling. However, the structural contributions of Ly6 proteins to regulation of effector molecules is poorly understood. This question is particularly relevant to the Ly6 protein QUIVER/SLEEPLESS (QVR/SSS), which has previously been shown to suppress excitability and synaptic transmission by upregulating potassium (K) channels and downregulating nicotinic acetylcholine receptors (nAChRs) in wake-promoting neurons to facilitate sleep in Drosophila. Using deletion mutagenesis, co-immunoprecipitations, ion flux assays, surface labeling and confocal microscopy, we demonstrate that only loop 2 is required for many of the previously described properties of SSS in transfected cells, including interactions with K channels and nAChRs. Collectively our data suggest that QVR/SSS, and by extension perhaps other Ly6 proteins, target effector molecules using limited protein motifs. Mapping these motifs may be useful in rational design of drugs that mimic or suppress Ly6-effector interactions to modulate nervous system function.