Imbalances in GABA (γ-aminobutyric acid) homoeostasis underlie psychiatric and movement disorders. The ability of the 65 kDa isoform of GAD (glutamic acid decarboxylase), GAD65, to control synaptic GABA levels is influenced through its capacity to auto-inactivate. In contrast, the GAD67 isoform is constitutively active. Previous structural insights suggest that flexibility in the GAD65 catalytic loop drives enzyme inactivation. To test this idea, we constructed a panel of GAD65/67 chimaeras and compared the ability of these molecules to auto-inactivate. Together, our data reveal the important finding that the C-terminal domain of GAD plays a key role in controlling GAD65 auto-inactivation. In support of these findings, we determined the X-ray crystal structure of a GAD65/67 chimaera that reveals that the conformation of the catalytic loop is intimately linked to the C-terminal domain.