AMPA glutamate receptors (AMPARs) mediate excitatory neurotransmission throughout the brain. Their signalling is uniquely diversified by brain region-specific auxiliary subunits, providing an opportunity for the development of selective therapeutics. AMPARs associated with TARP γ8 are enriched in the hippocampus, and are targets of emerging anti-epileptic drugs. To understand their therapeutic activity, we determined cryo-EM structures of the GluA1/2-γ8 receptor associated with three potent, chemically diverse ligands. We find that despite sharing a lipid-exposed and water-accessible binding pocket, drug action is differentially affected by binding-site mutants. Together with patch-clamp recordings and MD simulations we also demonstrate that ligand-triggered reorganisation of the AMPAR-TARP interface contributes to modulation. Unexpectedly, one ligand (JNJ-61432059) acts bifunctionally, negatively affecting GluA1 but exerting positive modulatory action on GluA2-containing AMPARs, in a TARP stoichiometry-dependent manner. These results further illuminate the action of TARPs, demonstrate the sensitive balance between positive and negative modulatory action, and provide a mechanistic platform for development of both positive and negative selective AMPAR modulators.