Mercury compounds affect synaptic transmission through multiple actions on various receptors and ion channels. One of their target sites is the GABAA receptor-channel complex, which is stimulated by mercury chloride (1-10 microM) in a potent and efficacious manner. We studied the mechanisms by which mercury chloride modulates the activity of the GABA system of rat dorsal root ganglion neurons in primary culture using the whole-cell patch clamp technique. The active form of mercury chloride was determined by measuring mercury potentiation of GABA-induced currents as a function of extracellular pH and chloride concentration. Experiments with various chloride concentrations indicated that Hg2+ was far less potent than HgCl2 and HgCl4(2-). Experiments with pH changes indicated that the mercury chloride-hydroxyl complex, predominantly HgCl4(OH)3-, was equally potent to non-complexed mercury chloride, predominantly HgCl4(2-). Mercury chloride potentiation of GABA-induced currents was use dependent, increasing with the frequency of channel openings. However, the potentiation was independent of membrane potential suggesting that mercury chloride binds to an external site of the receptor. Also supporting an external binding site is the observation that preapplication of mercury chloride alone for up to 60-sec potentiated GABA-induced currents. This site appears to be distinct from the zinc binding site. Desensitization of GABA-induced currents was accelerated by mercury chloride. Mercury chloride potentiation of the currents was blocked by cysteine and iodoacetamide suggesting involvement of sulfhydryl groups in this action.