Transmembrane AMPA receptor (AMPAR) regulatory proteins (TARPs) markedly enhance AMPAR function, altering ligand efficacy and receptor gating kinetics and thereby shaping the postsynaptic response. The structural mechanism underlying TARP effects on gating, however, is unknown. Here we find that the prototypical member of the TARP family, stargazin or γ-2, rescues gating deficits in AMPARs carrying mutations that destabilize the closed-cleft states of the ligand-binding domain (LBD), suggesting that stargazin reverses the effects of these mutations and likely stabilizes closed LBD states. Furthermore, stargazin promotes a more closed conformation of the LBD, as indicated by reduced accessibility to the large antagonist NBQX. Consistent with the functional studies, luminescence resonance energy transfer experiments directly demonstrate that the AMPAR LBD is on average more closed in the presence of stargazin, in both the apo and agonist-bound states. The additional cleft closure and/or stabilization of the more closed-cleft states of the LBD is expected to translate to higher agonist efficacy and could contribute to the structural mechanism for stargazin modulation of AMPAR function.