We have recently identified a homogeneous population of gamma-aminobutyric acid (GABA)-containing neurons in the ventral tegmental area (VTA), an area implicated in the reinforcing properties of alcohol. We evaluated the effects of local and systemic ethanol on VTA GABA neuron spontaneous activity in ethanol naive and chronically treated freely behaving rats and in anesthetized rats. In freely behaving animals, acute i.p. administration of 0.2 to 2.0 g/kg ethanol reduced the firing rate of VTA GABA neurons. Chronic administration of 2.0 g/kg i.p. ethanol enhanced baseline activity of VTA GABA neurons and induced tolerance to ethanol inhibition of their firing rate. In a separate group of freely behaving animals, tolerance to 0.4 to 2.0 g/kg i.p. ethanol-induced inhibition of VTA GABA neuron firing rate was observed following 2 weeks of chronic exposure to ethanol vapors producing intermittent blood alcohol levels of 158 mg/100 ml. In acute studies in halothane-anesthetized animals, ethanol applied locally into the VTA decreased the spontaneous firing rate of VTA GABA neurons, whereas systemic ethanol produced an early inhibition followed by a late excitation at 30 to 60 min after the ethanol injection, suggesting that ethanol modulation of an extrinsic input may excite VTA GABA neurons. Tolerance to local ethanol inhibition of VTA GABA neuron firing rate was produced by 2 weeks of chronic exposure to intermittent ethanol vapors. These results demonstrate the marked sensitivity of these neurons to ethanol and suggest that chronic ethanol administration produces selective adaptive circuit responses within the VTA or in extrategmental structures that regulate VTA GABA neuron activity.