Small-molecule modulators, including general anesthetics and other drugs, have been shown to bind directly to membrane-embedded sites in pentameric ligand-gated ion channels. However, due in part to limited structural data, the molecular basis and mechanistic impact of these interactions remain unclear. Using the structurally accessible model system GLIC, we applied a combination of X-ray crystallography, oocyte electrophysiology, and molecular dynamics simulations to characterize interactions stabilized in particular functional states by allosteric modulators. General anesthetics can allosterically favor closed channels by binding in the ion pore. Conversely, they can favor open channels, particularly in receptor variants engineered to enable subunit-interface contacts specific to the open state. A more controversial site located within each subunit can also be engineered to effect current enhancement, by stabilizing an accessible pocket linking the lipid bilayer to the pore-lining helix. On the basis of these data, we propose an integrated, multi-site mechanism for allosteric modulation, including atomic details of both inhibition and potentiation by general anesthetics, and a conceptual bridge between lipid- and receptor-based theories of anesthesia.