GABAA receptors containing the α5 subunit (5GABAARs) are found mainly in the hippocampus where they mediate a tonic chloride leak current and contribute a slow component to GABAergic inhibitory synaptic currents. Their inhibitory effect on the excitability of hippocampal neurons at least partly explains why changes in the level of activity of 5GABAARs affect cognition, learning and memory. These receptors have been implicated as potential therapeutic targets for a range of clinical conditions including age-related dementia, stroke, schizophrenia, Down syndrome and anesthetic- induced amnesia. Accordingly, a range of pharmacological modulators that selectively target 5GABAARs, as either inhibitors or allosteric enhancers, have been developed. Although many of these compounds show therapeutic effects in animal models of the above clinical disorders, none has been marketed yet due to unsuccessful clinical trials and toxicity in humans. These experiments have also revealed paradoxical effects of 5GABAAR modulation (e.g., cognitive impairments can be reversed by both positive and negative modulation), suggesting that our knowledge of the physiological roles of 5GABAARs is incomplete. This review highlights the various positive and negative modulators for 5GABAARs that have been developed, key findings concerning their effects in behavioral studies, and their importance across a number of therapeutic fields. It also highlights some of the gaps in our knowledge of the physiological and pathological roles of α5GABAARs.