The glycine receptor (GlyR) is potentiated by ethanol and other anesthetics. The potentiation mechanism at the molecular level is unknown and remains elusive, but mutagenic studies have shown that ethanol and other volatile anesthetics bind to a pocket between TM1, TM2, and TM3. The present study extends previous studies (Cheng et al., Proteins 2007;68:581-593) wherein we conducted homology modeling and molecular dynamics (MD) simulations to construct models of the homopentameric alpha1 subunits of the GlyR transmembrane domain in open and closed states. To understand the potentiation of GlyR by ethanol we compare the binding of ethanol molecules to the channel in these different states. We observe that ethanol stably resides inside solvent-accessible cavities found in the open state of GlyR that are formed by I229 (of TM1) in one subunit and S267 and A288 (of TM2 and TM3, respectively) in the adjacent subunit. The volume of these putative binding pockets is state-dependent. Selective binding to the open states of receptors has been proposed to explain the potentiating actions of this class of anesthetics. In accordance with this model, our MD simulations suggest that the potentiation of ethanol on GlyR may be effected through preferential binding of ethanol molecules to an inter-subunit binding pocket in the open state.