Etomidate and propofol are potent general anesthetics that act via GABAA receptor allosteric co-agonist sites located at transmembrane β+/α- inter-subunit interfaces. Early experiments in heteromeric receptors identified βN265 (M2-15') on β2 and β3 subunits as an important determinant of sensitivity to these drugs. Mechanistic analyses suggest that substitution with serine, the β1 residue at this position, primarily reduces etomidate efficacy, while mutation to methionine eliminates etomidate sensitivity and might prevent drug binding. However, the βN265 residue has not been photolabeled with analogs of either etomidate or propofol. Furthermore, substituted cysteine modification studies find no propofol protection at this locus, while etomidate protection has not been tested. Thus, evidence of contact between βN265 and potent anesthetics is lacking and it remains uncertain how mutations alter drug sensitivity. In the current study, we first applied heterologous α1β2N265Cγ2L receptor expression in Xenopus oocytes, thiol-specific aqueous probe modification, and voltage-clamp electrophysiology to test whether etomidate inhibits probe reactions at the β-265 sidechain. Using up to 300 µM etomidate, we found both an absence of etomidate effects on α1β2N265Cγ2L receptor activity and no inhibition of thiol modification. To gain further insight into anesthetic insensitive βN265M mutants, we applied indirect structure-function strategies, exploiting second mutations in α1β2/3γ2L GABAA receptors. Using α1M236C as a modifiable and anesthetic-protectable site occupancy reporter in β+/α- interfaces, we found that βN265M reduced apparent anesthetic affinity for receptors in both resting and GABA-activated states. βN265M also impaired the transduction of gating effects associated with α1M236W, a mutation that mimics β+/α- anesthetic site occupancy. Our results show that βN265M mutations dramatically reduce the efficacy/transduction of anesthetics bound in β+/α- sites, and also significantly reduce anesthetic affinity for resting state receptors. These findings are consistent with a role for βN265 in anesthetic binding within the β+/α- transmembrane sites.