The role of extra-synaptic receptors in the regulation of excitation and inhibition in the brain has attracted increasing attention. Because activity in the extra-synaptic receptors plays a role in regulating the level of excitation and inhibition in the brain, they may be important in determining the level of consciousness. This paper reviews briefly the literature on extra-synaptic GABA and NMDA receptors and their affinity to anesthetic drugs. We propose a neural population model that illustrates how the effect of the anesthetic drug propofol on GABAergic extra- synaptic receptors results in changes in neural population activity and the electroencephalogram (EEG). Our results show that increased tonic inhibition in inhibitory cortical neurons cause a dramatic increase in the power of both δ and α bands. Conversely, the effects of increased tonic inhibition in cortical excitatory neurons and thalamic relay neurons have the opposite effect and decrease the power in these bands. The increased δ−activity is in accord with observed data for deepening propofol anesthesia; but is absolutely dependent on the inclusion of extrasynaptic (tonic) GABA action in the model.