Long-term memory relies on modulation of synaptic connections in response to experience. This plasticity involves trafficking of AMPA receptors (AMPAR) and alteration of spine morphology. Arc, a gene induced by synaptic activity, mediates the endocytosis of AMPA receptors and is required for both long-term and homeostatic plasticity. We found that Arc increases spine density and regulates spine morphology by increasing the proportion of thin spines. Furthermore, Arc specifically reduces surface GluR1 internalization at thin spines, and Arc mutants that fail to facilitate AMPAR endocytosis do not increase the proportion of thin spines, suggesting that Arc-mediated AMPAR endocytosis facilitates alterations in spine morphology. Thus, by linking spine morphology with AMPAR endocytosis, Arc balances synaptic downscaling with increased structural plasticity. Supporting this, loss of Arc in vivo leads to a significant decrease in the proportion of thin spines and an epileptic-like network hyperexcitability.