Allosteric modulators exert actions on neurotransmitter receptors by positively or negatively altering the effective response of these receptors to their respective neurotransmitter. γ-Aminobutyric acid (GABA) type A ionotropic receptors (GABAARs) are major targets for allosteric modulators such as benzodiazepines, neurosteroids, and barbiturates. Analysis of substances that produce similar effects has been hampered by the lack of techniques to assess the localization and function of such agents in brain slices. Here we describe measurement of the sniffer patch laser uncaging response (SPLURgE), which combines the sniffer patch recording configuration with laser photolysis of caged GABA. This methodology enables the detection of allosteric GABAAR modulators endogenously present in discrete areas of the brain slice and allows for the application of exogenous GABA with spatiotemporal control without altering the release and localization of endogenous modulators within the slice. Here we demonstrate the development and use of this technique for the measurement of allosteric modulation in different areas of the thalamus. Application of this technique will be useful in determining whether a lack of modulatory effect on a particular category of neurons or receptors is due to insensitivity to allosteric modulation or a lack of local release of endogenous ligand. We also demonstrate that this technique can be used to investigate GABA diffusion and uptake. This method thus provides a biosensor assay for rapid detection of endogenous GABAAR modulators and has the potential to aid studies of allosteric modulators that exert effects on other classes of neurotransmitter receptors, such as glutamate, acetylcholine, or glycine receptors.