gamma-Aminobutyric acid, type A (GABAA) receptors, the major inhibitory neurotransmitter receptors in the central nervous system, are heteropentameric proteins assembled from distinct subunit classes with multiple subtypes, alpha(1-6), beta(1-4), gamma(1-3), delta(1), and epsilon(1). To examine the process of receptor assembly and targeting, we tagged the carboxyl terminus of the GABAA receptor alpha1 subunit with red-shifted enhanced green fluorescent protein (EGFP). Xenopus oocytes were injected with cRNA of this fusion protein, alpha1-EGFP, alone or in combination with cRNA of GABAA receptor beta2, gamma2, or beta2+gamma2 subunits. Within 72 h after injection, EGFP fluorescence was visible in all fusion protein-injected cells. The fluorescence was associated with the plasmalemma only when the beta2 subunit was co-injected with alpha1-EGFP. Texas Red-conjugated immunolabeling of EGFP on nonpermeabilized cells demonstrated that EGFP was localized extracellularly. Hence, the COOH terminus of the alpha1 subunit is extracellular. Two-electrode voltage clamp of alpha1-EGFPbeta2- and alpha1-EGFPbeta2 gamma2-injected oocytes demonstrates that these cells express functional receptors, with EC50 values for GABA and diazepam similar to wild-type receptors. Thus, a COOH-terminal tag of the alpha1 subunit appears to be functionally silent, providing a useful marker for studies of GABAA receptor expression, assembly, transport, targeting, and clustering. Moreover, the beta2 subunit is required for receptor assembly and surface expression.