Alcohol is the most consumed and abused psychoactive drug globally, but the molecular mechanisms driving alcohol action and its associated behaviors in the brain remain enigmatic. Here, we have discovered a transmembrane protein TMEM132B that is a GABA receptor (GABAR) auxiliary subunit. Functionally, TMEM132B promotes GABAR expression at the cell surface, slows receptor deactivation, and enhances the allosteric effects of alcohol on the receptor. In TMEM132B knockout (KO) mice or TMEM132B I499A knockin (KI) mice in which the TMEM132B-GABAR interaction is specifically abolished, GABAergic transmission is decreased and alcohol-induced potentiation of GABAR-mediated currents is diminished in hippocampal neurons. Behaviorally, the anxiolytic and sedative/hypnotic effects of alcohol are markedly reduced, and compulsive, binge-like alcohol consumption is significantly increased. Taken together, these data reveal a GABAR auxiliary subunit, identify the TMEM132B-GABAR complex as a major alcohol target in the brain, and provide mechanistic insights into alcohol-related behaviors.