Traditionally steroid hormones have been thought to exert their effects on the mammalian CNS via an interaction with intracellular receptors, producing gene-regulated changes in protein synthesis. Whilst this is undoubtedly the mechanism of action for many steroids, some endogenous and synthetic steroids induce hypnosis/anaesthesia rapidly, suggesting an alternative mechanism of action. Jeremy Lambert, John Peters and Glen Cottrell review recent evidence which clearly demonstrates that some steroids are potent stereoselective potentiators of the actions of GABA at GABAA receptors in vitro. Furthermore, at higher concentrations these steroids can directly activate the GABAA receptor. As a number of the active steroids occur endogenously, the fascinating possibility exists that they may influence GABAA receptors under physiological and pathophysiological conditions and so modulate the activity of the CNS.