Arachidonic acid is released by phospholipase A2 when activation of N-methyl-D-aspartate (NMDA) receptors by neurotransmitter glutamate raises the calcium concentration in neurons, for example during the initiation of long-term potentiation and during brain anoxia. Here we investigate the effect of arachidonic acid on glutamate-gated ion channels by whole-cell clamping isolated cerebellar granule cells. Arachidonic acid potentiates, and makes more transient, the current through NMDA receptor channels, and slightly reduces the current through non-NMDA receptor channels. Potentiation of the NMDA receptor current results from an increase in channel open probability, with no change in open channel current. We observe potentiation even with saturating levels of agonist at the glutamate- and glycine-binding sites on these channels; it does not result from conversion of arachidonic acid to lipoxygenase or cyclooxygenase derivatives, or from activation of protein kinase C. Arachidonic acid may act by binding to a site on the NMDA receptor, or by modifying the receptor's lipid environment. Our results suggest that arachidonic acid released by activation of NMDA (or other) receptors will potentiate NMDA receptor currents, and thus amplify increases in intracellular calcium concentration caused by glutamate. This may explain why inhibition of phospholipase A2 blocks the induction of long-term potentiation.