GABAergic interneurons are highly diverse and operate with a corresponding diversity of GABA_A receptor subtypes in controlling behaviour. In this article, we review the significance of GABA_A receptor heterogeneity for neural circuit development and central nervous system pharmacology. GABA_A receptor subtypes were identified as selective targets for behavioural actions of benzodiazepines and of selected intravenous anesthetic agents using point mutations which render a specific receptor subtype insensitive to the action of the respective drugs and also by novel subtype-selective ligands. The pharmacological separation of anxiolysis and sedation guides the development of novel anxiolytics, while inverse agonism at extrasynaptic GABA_A receptors involved in learning and memory is currently being evaluated as a novel therapeutic principle for symptomatic memory enhancement.