Ion channels are part of nature’s solution for regulating biological environments. Every ion channel consists of a chain of amino acids carrying a strong and sharply varying permanent charge, folded in such a way that it creates a nanoscopic aqueous pore spanning the otherwise mostly impermeable membranes of biological cells. These naturally occurring proteins are particularly interesting to device engineers seeking to understand how such nanoscale systems realize device-like functions. This work is a study of such biological ion channels in terms of ion permeation and selectivity. The approach taken is based on transport Monte Carlo method. We have used BioMOCA, a three-dimensional coarse-grained simulator developed at the University of Illinois at Urbana-Champaign. In our simulations the water molecules in the system are considered as continuum background, where they interact with the ions through scattering events. The rate of scattering events is inversely related to the diffusivity of ions in the water, which itself is a function of ion position. Incorporating such position dependent diffusion coefficients for different ion species has been studied and the simulation results are compared with the experiments. Furthermore, the permittivity of water in the channels or nanopores has been studied. As it turns out, not only is the permittivity of water different in such confined regions; it is also an anisotropic parameter and can drastically change based on pore diameter. In particular we have studied the α-hemolysin channel with covalently attached molecular adapter β-cyclodextrin. Although the wild type of this ion channel is a toxic protein in nature, its engineered mutations with molecular adapters could be key components of fabricated nanoscale biosensors.