Vigilance, anxiety, epileptic activity, and muscle tone can be modulated by drugs acting at the benzodiazepine (BZ) site of gamma-aminobutyric acid type A (GABAA) receptors. In vivo, BZ sites are potential targets for endogenous ligands regulating the corresponding central nervous system states. To assess the physiological relevance of BZ sites, mice were generated containing GABAA receptors devoid of BZ sites. Following targeted disruption of the gamma 2 subunit gene, 94% of the BZ sites were absent in brain of neonatal mice, while the number of GABA sites was only slightly reduced. Except for the gamma 2 subunit, the level of expression and the regional and cellular distribution of the major GABAA receptor subunits were unaltered. The single channel main conductance level and the Hill coefficient were reduced to values consistent with recombinant GABAA receptors composed of alpha and beta subunits. The GABA response was potentiated by pentobarbital but not by flunitrazepam. Diazepam was inactive behaviorally. Thus, the gamma 2 subunit is dispensable for the assembly of functional GABAA receptors but is required for normal channel conductance and the formation of BZ sites in vivo. BZ sites are not essential for embryonic development, as suggested by the normal body weight and histology of newborn mice. Postnatally, however, the reduced GABAA receptor function is associated with retarded growth, sensorimotor dysfunction, and drastically reduced life-span. The lack of postnatal GABAA receptor regulation by endogenous ligands of BZ sites might contribute to this phenotype.