Activation of cAMP-dependent protein kinase (PKA) can enhance or reduce the function of neuronal GABAA receptors, the major sites of fast synaptic inhibition in the brain. This differential regulation depends on PKA-induced phosphorylation of adjacent conserved sites in the receptor beta subunits. Phosphorylation of beta 3 subunit-containing receptors at S408 and S409 enhanced the GABA-activated response, whereas selectively mutating S408 to alanine converted the potentiation into an inhibition, comparable to that of beta 1 subunits, which are phosphorylated solely on S409. These distinct modes of regulation were interconvertible between beta 1 and beta 3 subunits and depended upon the presence of S408 in either subunit. In contrast, beta 2 subunit-containing receptors were not phosphorylated or affected by PKA. Differential regulation by PKA of postsynaptic GABAA receptors containing different beta subunits may have profound effects on neuronal excitability.