The cys-loop receptors are named after a characteristic loop formed by a disulfide bond between two cysteine residues in the N terminal extracellular domain. 
They are part of a larger family of pentameric ligand-gated ion channels that usually lack this disulfide bond, hence the tentative name "Pro-loop receptors".
A binding site in the extracellular N-terminal ligand-binding domain gives them receptor specificity for (1) acetylcholine (AcCh), (2) serotonin, (3) glycine, (4) glutamate and (5) γ-aminobutyric acid (GABA) in vertebrates. The receptors are subdivided with respect to the type of ion that they conduct (anionic or cationic) and further into families defined by the endogenous ligand. They are usually pentameric with each subunit containing 4 transmembrane helices constituting the transmembrane domain, and a beta sheet sandwich type, extracellular, N terminal, ligand binding domain. Some also contain an intracellular domain like shown in the image.
The prototypic ligand-gated ion channel is the nicotinic acetylcholine receptor. It consists of a pentamer of protein subunits (typically ααβγδ), with two binding sites for acetylcholine (one at the interface of each alpha subunit). When the acetylcholine binds it alters the receptor's configuration (twists the T2 helices which moves the leucine residues, which block the pore, out of the channel pathway) and causes the constriction in the pore of approximately 3 angstroms to widen to approximately 8 angstroms so that ions can pass through. This pore allows Na ions to flow down their electrochemical gradient into the cell. With a sufficient number of channels opening at once, the inward flow of positive charges carried by Na ions depolarizes the postsynaptic membrane sufficiently to initiate an action potential.
A bacterial homologue to an LIC has been identified, hypothesized to act nonetheless as a chemoreceptor. This prokaryotic nAChR variant is known as the GLIC receptor, after the species in which it was identified;  loeobacter igand-gated on hannel.