In mammalian cells, all-trans farnesol, a 15-carbon isoprenol, is a product of the mevalonate pathway. It is the natural substrate of alcohol dehydrogenase and a substrate for CYP2E1, two enzymes implicated in ethanol metabolism. Studies have shown that farnesol is present in the human brain and inhibits voltage-gated Ca 2+ channels at much lower concentrations than ethanol. Here we show that farnesol modulates the activity of γ-aminobutyric acid type A receptors (GABA A Rs), some of which also mediate the sedative activity of ethanol. Electrophysiology experiments performed in HEK cells expressing human α1β3γ2 or α6β3γ2 GABA A Rs revealed that farnesol increased chloride currents through positive allosteric modulation of these receptors and showed dependence on both the alcoholic functional group of farnesol and the length of the alkyl chain for activity. In silico studies using long-timescale unbiased all-atom molecular dynamics (MD) simulations of the human α1β3γ2 GABA A receptors revealed that farnesol modulates the channel by directly binding to the transmembrane neurosteroid-binding site, after partitioning into the surrounding membrane and reaching the receptor by lateral diffusion. Channel activation by farnesol was further characterized by several structural and dynamic variables, such as global twisting of the receptor's extracellular domain, tilting of the transmembrane M2 helices, radius, cross-sectional area, hydration status, and electrostatic potential of the channel pore. Our results expand the pharmacological activities of farnesol to yet another class of ion channels implicated in neurotransmission, thus providing a novel path for understanding and treatment of diseases involving GABA A receptor dysfunction.