Glycine receptors are Cys loop ligand-gated ion channels that mediate fast inhibitory synaptic transmission in the mammalian central nervous system. The functionally distinct splice variants alpha3L and alpha3K of the human glycine receptor differ by a 15-amino acid insert within the long intracellular TM3-4 loop, a region of high intersubunit diversity. In a mutational study, effects of the insert on ion channel function and secondary structure of the TM3-4 loop were investigated. Whole cell current responses and protein surface expression data indicated that the major effect of mutations within the insert was on channel gating. Changes in channel gating correlated with the distribution of charged residues about the splice region. Analysis of complex molecular weight indicated that recombinant TM3-4 loops of alpha3L and alpha3K associated into oligomers of different stoichiometry. Secondary structure analysis suggested that the insert stabilized the overall fold of the large cytoplasmic domain of alpha3L subunits. The absence of the insert resulted in a channel that was still functional, but the TM3-4 cytoplasmic domain appeared not stably folded. Thus, our data identified the spliced insert within the large TM 3-4 loop of alpha3 Gly receptors as a novel regulatory motif that serves a 2-fold role: (i) the presence of the insert stabilizes the overall spatial structure of the domain, and (ii) the insert presents a control unit that regulates gating of the receptor ion channel.