GABA is the major inhibitory neurotransmitter in the central nervous system. The GABA-A receptor is a chloride gating pentameric structure that can be allosteric modulated by several classes of compounds. GABA-A receptor subtype selective compounds may provide the basis for developing new drugs. The compound named AA29504 was characterized with respect to subtype selectivity in Xenopus laevis recombinant expression system and in hippocampal slice electrophysiology. AA29504 potentiated GABA currents at synaptic GABA-A receptors (a1b3y2s). The modulatory effect of AA29504 was independent of the alpha subunit but sensitive to the presence of the gamma subunit. However, the modulatory effect was insensitive to the benzodiazepine antagonist flumazenil, making an interaction with the benzodiazepine site located at the interface between the alpha and gamma subunit unlikely. GABA-A receptors containing beta2/3 were more strongly positive modulated than beta1 containing receptors. The strongest positively modulatory effect was seen at extrasynaptically located delta-subunit containing GABA-A receptors. When Gaboxadol, a functionally selective extrasynaptic GABA-A agonist was used the response was strongly potentiated by AA29504 at extrasynaptic GABA-A receptors. Whole-cell patch-clamp recordings were made from dentate gyrus granule cells in mouse brain slices. Recordings of mIPSCs showed that AA29504 (1 mM) significantly prolonged the mIPSC decay time constant. The GABA-A receptor antagonist SR95531 revealed a small tonic GABA-A current in presence of AA29504. AA29504 strongly potentiated the tonic current to Gaboxadol. In conclusion, AA29504 exerts a unique subtype- dependent modulation of GABA and Gaboxadol responses particularly at extrasynaptic GABA-A receptors.