NMDA receptors are tetrameric complexes of GluN1, GluN2A-D, and GluN3A-B subunits and are involved in normal brain function and neurologic disorders. We identified a novel class of stereoselective pyrrolidinone (PYD) positive allosteric modulators for GluN2C-containing NMDA receptors, exemplified by methyl 4-(3-acetyl-4-hydroxy-1-[2-(2-methyl-1H-indol-3-yl)ethyl]-5-oxo-2,5-dihydro-1H-pyrrol-2-yl)benzoate. Here we explore the site and mechanism of action of a prototypical analog, PYD-106, which at 30 mM does not alter responses of NMDA receptors containing GluN2A, GluN2B, and GluN2D and has no effect on AMPA [a-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid] and kainate receptors. Coapplication of 50 mM PYD-106 with a maximally effective concentration of glutamate and glycine increases the response of GluN1/GluN2C NMDA receptors in HEK-293 cells to 221% of that obtained in the absence of PYD (taken as 100%). Evaluation of the concentration dependence of this enhancement revealed an EC 50 value for PYD of 13 mM. PYD-106 increased opening frequency and open time of single channel currents activated by maximally effective concentrations of agonist but only had modest effects on glutamate and glycine EC 50 . PYD-106 selectively enhanced the responses of diheteromeric GluN1/GluN2C receptors but not triheteromeric GluN1/GluN2A/GluN2C receptors. Inclusion of residues encoded by GluN1-exon 5 attenuated the effects of PYD. Three GluN2C residues (Arg194, Ser470, Lys470), at which mutagenesis virtually eliminated PYD function, line a cavity at the interface of the ligand binding and the amino terminal domains in a homology model of GluN1/GluN2C built from crystallographic data on GluN1/GluN2B. We propose that this domain interface constitutes a new allosteric modulatory site on the NMDA receptor.