Glycine is a major neurotransmitter involved in several fundamental neuronal processes. The identity of the metabotropic receptor mediating slow neuromodulatory effects of glycine is unknown. We identified an orphan G protein-coupled receptor, GPR158, as a metabotropic glycine receptor (mGlyR). Glycine and a related modulator, taurine, directly bind to a Cache domain of GPR158, and this event inhibits the activity of the intracellular signaling complex regulator of G protein signaling 7-G protein β5 (RGS7-Gβ5), which is associated with the receptor. Glycine signals through mGlyR to inhibit production of the second messenger adenosine 3',5'-monophosphate. We further show that glycine, but not taurine, acts through mGlyR to regulate neuronal excitability in cortical neurons. These results identify a major neuromodulatory system involved in mediating metabotropic effects of glycine, with implications for understanding cognition and affective states.