Alpha1-containing glycine receptors (GlyRs) are major mediators of synaptic inhibition in the spinal cord and brain stem. Recent studies reported the presence of alpha 2-containing GlyRs in other brain regions, such as nucleus accumbens and cerebral cortex. GlyR activation decreases neuronal excitability associated with sensorial information, motor control, and respiratory functions; all of which are significantly altered during ethanol intoxication. We evaluated the role of beta GlyR subunits and of two basic amino acid residues, K389 and R390, located in the large intracellular loop (IL) of the alpha 2 GlyR subunit, which are important for binding and functional modulation by G beta gamma, the dimer of the trimeric G protein conformation, using HEK-293 transfected cells combined with patch clamp electrophysiology. We demonstrate a new modulatory role of the beta subunit on ethanol sensitivity of alpha 2 subunits. Specifically, we found a differential allosteric modulation in homomeric alpha 2 GlyRs compared with the alpha 2 beta heteromeric conformation. Indeed, while alpha 2 was insensitive, alpha 2 beta GlyRs were substantially potentiated by ethanol, GTP-gamma-S, propofol, Zn2+ and trichloroethanol. Furthermore, a G beta gamma scavenger (ct-GRK2) selectively attenuated the effects of ethanol on recombinant alpha 2 beta GlyRs. Mutations in an alpha 2 GlyR co-expressed with the beta subunit (alpha 2AA beta) specifically blocked ethanol sensitivity, but not propofol potentiation. These results show a selective mechanism for low ethanol concentration effects on homomeric and heteromeric conformations of alpha 2 GlyRs and provide a new mechanism for ethanol pharmacology, which is relevant to upper brain regions where alpha 2 GlyRs are abundantly expressed.