The functional reconstitution of the chloride channel coupled glycine receptor is described. Glycine receptors were purified from the cholate extract of rat spinal cord membranes by affinity chromatography and incorporated into phospholipid vesicles by the addition of phosphatidylcholine and removal of detergent by gel filtration. The reconstituted vesicles showed the same polypeptide composition as the purified receptor (proteins of Mr 48,000 and 58,000). The pharmacological characteristics of the glycine receptor were also preserved in the proteoliposomes, as demonstrated by the displacement of [3H]strychnine binding by several glycinergic ligands and by photoaffinity labeling experiments. In order to observe functional responses (i.e., specific agonist-induced anion translocation), we have developed an assay based on the fluorescence quenching of an anion-sensitive entrapped probe, SPQ [6-methoxy-N-(3-sulfopropyl)quinolinium]. Reconstituted vesicles were loaded with the fluorescent probe during a freeze-thaw-sonication cycle in the presence of added liposomes containing cholesterol. In such a reconstituted system, glycine receptor agonists are able to increase the rate of anion influx into the vesicles. The action of agonists is blocked by the simultaneous presence of strychnine or other glycine antagonists. Our results show that the purified 48,000- and 58,000-dalton polypeptides reconstituted into phospholipid vesicles can bind ligands and promote specific ion translocation in a way similar to the glycine receptor in its native environment.