Two cDNAs encoding novel GABAA receptor subunits were isolated from a rat brain library. These subunits, gamma 2 and delta, share approximately 35% sequence identity with alpha and beta subunits and form functional GABA-gated chloride channels when expressed alone in vitro. The gamma 2 subunit is the rat homolog of the human gamma 2 subunit recently shown to be important for benzodiazepine pharmacology. Cellular localization of the mRNAs encoding the gamma 2 and delta subunits in rat brain revealed that largely distinct neuronal subpopulations express the two subunits. The delta subunit distribution resembles that of the high affinity GABAA receptor labeled with [3H]muscimol; the gamma 2 subunit distribution resembles that of GABAA/benzodiazepine receptors labeled with [3H]flunitrazepam. These findings have implications for the composition of two different GABAA receptor subtypes and for information processing in networks using GABA for signaling.