GABAA receptors (GABARs) have long been the focus for acute alcohol actions with evidence for behaviorally relevant low millimolar alcohol actions on tonic GABA currents and extrasynaptic α4/6, δ, and β3 subunit-containing GABARs. Using recombinant expression in oocytes combined with two electrode voltage clamp, we show with chimeric β2/β3 subunits that differences in alcohol sensitivity among β subunits are determined by the extracellular N-terminal part of the protein. Furthermore, by using point mutations, we show that the β3 alcohol selectivity is determined by a single amino acid residue in the N-terminus that differs between GABAR β subunits (β3Y66, β2A66, β1S66). The β3Y66 residue is located in a region called "loop D" which in γ subunits contributes to the imidazobenzodiazepine (iBZ) binding site at the classical α+γ2- subunit interface. In structural homology models β3Y66 is the equivalent of γ2T81 which is one of three critical residues lining the benzodiazepine binding site in the γ2 subunit loop D, opposite to the "100H/R-site" benzodiazepine binding residue in GABAR α subunits. We have shown that the α6R100Q mutation at this site leads to increased alcohol-induced motor in-coordination in alcohol non-tolerant rats carrying the α6R100Q mutated allele. Based on the identification of these two amino acid residues α6R100 and β66 we propose a model in which β3 and δ containing GABA receptors contain a unique ethanol site at the α4/6+β3- subunit interface. This site is homologous to the classical benzodiazepine binding site and we propose that it not only binds ethanol at relevant concentrations (EC50-17 mM), but also has high affinity for a few selected benzodiazepine site ligands including alcohol antagonistic iBZs (Ro15-4513, RY023, RY024, RY80) which have in common a large moiety at the C7 position of the benzodiazepine ring. We suggest that large moieties at the C7-BZ ring compete with alcohol for its binding pocket at a α4/6+β3- EtOH/Ro15-4513 site. This model reconciles many years of alcohol research on GABARs and provides a plausible explanation for the competitive relationship between ethanol and iBZ alcohol antagonists in which bulky moieties at the C7 position compete with ethanol for its binding site. We conclude with a critical discussion to suggest that much of the controversy surrounding this issue might be due to fundamental species differences in alcohol and alcohol antagonist responses in rats and mice.