Despite its long history of use and abuse in human culture, the molecular basis for alcohol action in the brain is poorly understood. The recent determination of the atomic-scale structure of GLIC, a prokaryotic member of the pentameric ligand-gated ion channel (pLGIC) family, provides a unique opportunity to characterize the structural basis for modulation of these channels, many of which are alcohol targets in brain. We observed that GLIC recapitulates bimodal modulation by n-alcohols, similar to some eukaryotic pLGICs: methanol and ethanol weakly potentiated proton-activated currents in GLIC, whereas n-alcohols larger than ethanol inhibited them. Mapping of residues important to alcohol modulation of ionotropic receptors for glycine, γ-aminobutyric acid, and acetylcholine onto GLIC revealed their proximity to transmembrane cavities that may accommodate one or more alcohol molecules. Site-directed mutations in the pore-lining M2 helix allowed the identification of four residues that influence alcohol potentiation, with the direction of their effects reflecting α-helical structure. At one of the potentiation-enhancing residues, decreased side chain volume converted GLIC into a highly ethanol-sensitive channel, comparable to its eukaryotic relatives. Covalent labeling of M2 positions with an alcohol analog, a methanethiosulfonate reagent, further implicated residues at the extracellular end of the helix in alcohol binding. Molecular dynamics simulations elucidated the structural consequences of a potentiation-enhancing mutation and suggested a structural mechanism for alcohol potentiation via interaction with a transmembrane cavity previously termed the "linking tunnel." These results provide a unique structural model for independent potentiating and inhibitory interactions of n-alcohols with a pLGIC family member.