Neuroactive steroids are among the most efficacious modulators of the mammalian GABA-A receptor. Previous work has proposed that receptor potentiation is mediated by steroid interactions with a site defined by the residues α1Asn407/Tyr410 in the M4 transmembrane domain and residue α1Gln241 in the M1 domain. We examined the role of residues in the α1 subunit M1 domain in the modulation of the rat β1β2γ2L GABA-A receptor by neuroactive steroids. The data demonstrate that the region is critical to the actions of potentiating neuroactive steroids. Receptors containing the α1Q241W or α1Q241L mutations were insensitive to (3α,5α)-3-hydroxypregnan-20-one (3α5αP), albeit with different underlying mechanisms. The α1Q241S mutant was potentiated by 3α5αP, but the kinetic mode of potentiation was altered by the mutation. It is noteworthy that the α1Q241L mutation had no effect on channel potentiation by (3α,5α)-3-hydroxymethylpregnan-20-one, but mutation of the neighboring residue, α1Ser240, prevented channel modulation. A steroid lacking an H-bonding group on C3 (5α-pregnan-20-one) potentiated the wild-type receptor but not the α1Q241L mutant. The findings are consistent with a model in which the α1Ser240 and α1Gln241 residues shape the surface to which steroid molecules bind.