Molecularly diverse forms of the NMDA-receptor subunit NRI are formed by alternative RNA splicing. Differential splicing of three exons generates as many as eight NRI splice variants, seven of which have been identified in cDNA libraries. The alternatively spliced exons encode a 21 amino acid sequence in the N-terminus domain (termed NI), and adjacent sequences of 37 and 38 amino acids in the C-terminus domain (termed C1 and C2, respectively). Splicing out the exon segment that encodes the C2 cassette removes the first stop codon, resulting in a new open reading frame that encodes an unrelated sequence of 22 amino acids (C2') before a second stop codon is reached. Differential RNA splicing alters the structural, physiological and pharmacological properties of receptors that comprise NRI subunits. Diversity of NMDA receptors is also caused by differential association with members of the NR2 gene family. The finding of cell-specific expression and developmental regulation of NRI splice variants, and of the NR2 subunits, provides an explanation for the diversity of properties of NMDA receptors in different neuronal populations.