The influx of Na+ is fundamental to electrical signalling in the nervous system and is essential for such basic signals as action potentials and excitatory postsynaptic potentials. During periods of bursting or high levels of discharge activity, large increases in intracellular Na+ concentration ([Na+]i) are produced in neuronal soma and dendrites. However, the intracellular signalling function of raised postsynaptic [Na+]i is unknown. Here we show that [Na+]i regulates the function of NMDA (N-methyl-D-aspartate) receptors, a principal subtype of glutamate receptor. NMDA-receptor-mediated whole-cell currents and NMDA-receptor single-channel activity were increased by raising [Na+]i and channel activity decreased upon lowering [Na+]i; therefore, the activity of NMDA channels tracks changes in [Na+]i. We found that the sensitivity of the channel to Na+ was set by a Src kinase that is associated with the channel. Raising [Na+]i selectively increased synaptic responses mediated by NMDA receptors, but not by non-NMDA receptors. Thus, the change in postsynaptic [Na+]i that occurs during neuronal activity is a signal for controlling the gain of excitatory synaptic transmission. This mechanism may be important for NMDA-receptor-dependent plasticity and toxicity in the central nervous system.