The tubulin-binding protein gephyrin copurifies with the inhibitory glycine receptor (GlyR) and is essential for its postsynaptic localization. Here we have analyzed the interaction between the GlyR and recombinant gephyrin and identified a gephyrin binding site in the cytoplasmic loop between the third and fourth transmembrane segments of the beta subunit. GlyR alpha subunits and GABAA receptor proteins failed to bind recombinant gephyrin. However, insertion of an 18 residue segment of the GlyR beta subunit into the GABAA receptor beta 1 subunit conferred gephyrin binding both in an overlay assay and in transfected mammalian cells. These results indicate that beta subunit expression is essential for the formation of a postsynaptic GlyR matrix.