The gene that encodes the beta 3 subunit of the gamma-aminobutyrate-Type A (GABAA) receptor is widely expressed in brain tissue and has been associated with imprinted genetic disorders. Here, the 5' regions of the human and rat genes were characterized and found to be highly conserved in both coding and non-coding sequences. A novel transcript of the human gene revealed the existence of an alternative exon 1 (exon 1a) that encodes a variant signal sequence. Relative levels of the alternative transcripts were found to vary between fetal and adult brain, and between different brain regions. Endogenous beta 3 subunit transcripts were also detected in several immortalized cell lines, including human kidney 293 cells. Transcription of exon 1 is initiated from multiple sites within a pyrimidine-rich region of the gene. This region of the human gene also exhibits strong promoter activity and binds nuclear factors at a site which overlaps the transcriptional start sites. The promoter element was shown to bind Sp1 and at least one other unidentified nuclear factor.