In the central nervous system, receptors for gamma-aminobutyric acid (GABA) are responsible for inhibitory neurotransmission. Anatomical and electrophysiological studies indicate that GABAC receptors are composed of rho subunits. While the rho 1 subunit of various species forms homooligomeric receptors with GABAC-like properties, molecular cloning has identified additional rho subunits whose functional role is unclear. By RT-PCR, we demonstrated that rho 1 expression is primarily restricted to the retina, whereas the rho 2 subunit was present in all brain regions tested. Transfection of HEK-293 cells with rho 2 cDNA resulted in GABA-gated whole-cell currents that differed from those mediated by the rho 1 subunit in two respects: maximal amplitude (rho 1:rho 2 approximately 4:1) and inactivation time course (rho 1:rho 2 approximately 2:1). Cotransfection of rho 1 and rho 2 cDNA in a 1:1 ratio generated whole-cell currents with large amplitudes characteristic of rho 1 but more rapid inactivation typical for rho 2. This observation suggested formation of heterooligomeric GABAC receptors with distinct features. Therefore, we tested the assembly of rho 1 and rho 2 subunits by cotransfecting rho 2 cDNA together with a chimeric rho 1 beta 1 subunit, known to interfere with rho 1 assembly in a dominant-negative fashion. Reduction of rho 2 generated currents correlated with the ratio of chimeric to rho 2 cDNA. Secondly, we determined that the picrotoxinin sensitivity of cells transfected with various ratios of rho 1 and rho 2 cDNA differed from that expected of a pure mixture of homooligomeric receptors. The latter two observations support the idea that rho 1 and rho 2 subunits form heterooligomeric GABAC receptors in mammalian cells. Together, our results indicate that the presence of both rho subunits enables the formation of heterooligomeric receptors with physical properties distinct from homooligomers, thus increasing the diversity of GABAC receptors in the CNS.