The neuronal glycine receptor is a ligand-gated chloride channel composed of ligand binding alpha and structural beta polypeptides. Homology screening of a human fetal brain cDNA library resulted in the identification of two alternative splice variants of the glycine receptor alpha3 subunit. The amino acid sequence predicted for the alpha3L variant was largely identical to the corresponding rat subunit. In contrast, the novel splice variant alpha3K lacked the coding sequence for 15 amino acids located within the cytoplasmic loop connecting transmembrane spanning region 3 (TM3) and TM4. Using P1 artificial chromosome (PAC) clones, the structure of the GLRA3 gene was elucidated and its locus assigned to human chromosomal bands 4q33-q34 by fluorescence in situ hybridization. Two transcripts of 2.4 and 9 kilobases, corresponding to alpha3L and alpha3K, respectively, were identified and found to be widely distributed throughout the human central nervous system. Structural analysis of the GLRA3 gene revealed that the alpha3K transcript resulted from a complex splice event where excision of the novel exon 8A comprising the alternative sequence of 45 base pairs coincides with the persistence of a large intronic sequence in the 3'-untranslated region. Functional expression in HEK 293 cells of alpha3L and alpha3K subunits resulted in the formation of glycine-gated chloride channels that differed significantly in desensitization behavior, thus defining the cytoplasmic loop as an important determinant of channel inactivation kinetics.