Under most circumstances, GABA activates chloride-selective channels and thereby inhibits neuronal activity. Here, we identify a GABA receptor in the nematode Caenorhabditis elegans that conducts cations and is therefore excitatory. Expression in Xenopus oocytes demonstrates that LGC-35 is a homopentameric cation-selective receptor of the cys-loop family exclusively activated by GABA. Phylogenetic analysis suggests that LGC-35 evolved from GABA-A receptors, but the pore-forming domain contains novel molecular determinants that confer cation selectivity. LGC-35 is expressed in muscles and directly mediates sphincter muscle contraction in the defecation cycle in hermaphrodites, and spicule eversion during mating in the male. In the locomotory circuit, GABA release directly activates chloride channels on the muscle to cause muscle relaxation. However, GABA spillover at these synapses activates LGC-35 on acetylcholine motor neurons, which in turn cause muscles to contract, presumably to drive wave propagation along the body. These studies demonstrate that both direct and indirect excitatory GABA signaling plays important roles in regulating neuronal circuit function and behavior in C. elegans.