Alteration of agonist affinity is a potential mechanism for pharmacological modulation of ligand-gated receptor channel function. The time course for receptor activation and current onset is determined by the combined rates for two kinetic transitions that underlie the protein confirmations for binding agonist and channel gating. Using ultrafast ligand exchange techniques, we distinguish between these previously difficult to separate events and demonstrate their independent pharmacological modulation. Diazepam, which increases apparent affinity of gamma-aminobutyric acid (GABA) to GABAA receptors, was used to examine its effects on GABA binding and ion channel gating of expressed alpha 2 beta 1 gamma 2 receptors from excised outside-out patches of acutely transfected HEK 293 cells. Diazepam increased rates of current onset evoked by low concentrations (< 1 mM) but not at saturating GABA concentrations. Furthermore, rates of current decay were not affected during brief applications of GABA, and thus, demonstrated a diazepam specific effect on ligand binding affinity and not channel gating kinetics. However, current decay during and following prolonged GABA applications were altered by diazepam in a fashion similar to that for higher concentrations of GABA which also increased receptor desensitization. These findings and analysis by computer modeling indicated that diazepam likely enhances GABA receptor currents primarily by accelerating GABA association to its receptor at the first agonist binding site. These results provide the first direct physiological evidence for pharmacological modulation of microscopic binding affinity of GABA receptors.