G protein-activated inwardly rectifying potassium (GIRK or Kir3) channels are directly gated by the βγ subunits of G proteins and contribute to inhibitory neurotransmitter signaling pathways. Paradoxically, volatile anesthetics such as halothane inhibit these channels. We find that neuronal Kir3 currents are highly sensitive to inhibition by halothane. Given that Kir3 currents result from increased Gβγ available to the channels, we asked whether reducing available Gβγ to the channel would adversely affect halothane inhibition. Remarkably, scavenging Gβγ using the C-terminal domain of β-adrenergic receptor kinase (cβARK) resulted in channel activation by halothane. Consistent with this effect, channel mutants that impair Gβγ activation were also activated by halothane. A single residue, phenylalanine 192, occupies the putative Gβγ gate of neuronal Kir3.2 channels. Mutation of Phe-192 at the gate to other residues rendered the channel non-responsive, either activated or inhibited by halothane. These data indicated that halothane predominantly interferes with Gβγ-mediated Kir3 currents, such as those functioning during inhibitory synaptic activity. Our report identifies the molecular correlate for anesthetic inhibition of Kir3 channels and highlights the significance of these effects in modulating neurotransmitter-mediated inhibitory signaling.