1. Cis-9,10-octadecenoamide (cOA) accumulates in the CSF of sleep-deprived cats and may represent a novel signalling molecule. Synthetic cOA has been shown to induce physiological sleep when injected into laboratory rats. Here we assess the cellular mode of action of cOA in vitro. 2. In all rat cultured cortical neurones (pyramidal cells) examined, the synthetic brain lipid (3.2-64 microM) enhanced the responses to subsaturating GABA concentrations (up to circa 2x) in a concentration-dependent manner (EC50, circa 15 microM). 3. (20 microM) cOA significantly enhanced the affinity of exogenous GABA for its receptor without changing the Hill slope or the maximal response. These effects were not voltage-dependent or secondary to shifts in E(Cl). 4. In the absence of GABA, cOA directly evoked small inhibitory currents in a subpopulation (<7%) of sensitive cells. 5. 20 microM cOA reversibly enhanced the duration of spontaneous inhibitory post synaptic currents (circa 2 fold) without significantly altering their amplitude. 6. At 32-64 microM, cOA reversibly reduced the incidence and amplitude of both inhibitory post synaptic currents (i.p.s.cs) and excitatory post synaptic currents (e.p.s.cs) in the cultured neuronal circuits in common with other depressant drugs acting at the GABA(A) receptor. 7. 32 microM Oleic acid did not modulate exogenous GABA currents or synaptic activity suggesting that cOAs actions are mediated through a specific receptor. 8. A specific, protein-dependent interaction with GABA(A) receptors was confirmed in Xenopus oocytes. Recombinant human receptors were modulated by 10 microM cOA (and diazepam) only when a gamma2 subunit was co-expressed with alpha1beta2: the cOA response was not sensitive to the specific benzodiazepine antagonist flumazenil (1 microM). 9. cOA may represent an endogenous ligand for allosteric modulatory sites on isoforms of GABA(A) receptors which are crucial for the regulation of arousal and have recently been implicated in the circadian control of physiological sleep.