The amino acid at position 160 of the ligand-binding subunit, alpha 1, is an important determinant of agonist and antagonist binding to the glycine receptor. Exchange of the neighboring residues, phenylalanine at position 159 and tyrosine at position 161, increased the efficacy of amino acid agonists. Whereas wild-type alpha 1 channels expressed in Xenopus oocytes required 0.7 millimolar beta-alanine for a half-maximal response, the doubly mutated (F159Y,Y161F) alpha 1 subunit had an affinity for beta-alanine (which was more potent than glycine) that was 110-fold that of the wild type. Also, gamma-aminobutyric acid and D-serine, amino acids that do not activate wild-type alpha 1 receptors, efficiently gated the mutant channel. Thus, aromatic hydroxyl groups are crucial for ligand discrimination at inhibitory amino acid receptors.