Calcium-permeable N-methyl-d-aspartate (NMDA) receptors are tetrameric cation channels composed of glycine-binding NR1 and glutamate-binding NR2 subunits, which require binding of both glutamate and glycine for efficient channel gating. In contrast, receptors assembled from NR1 and NR3 subunits function as calcium-impermeable excitatory glycine receptors that respond to agonist application only with low efficacy. Here, we show that antagonists of and substitutions within the glycine-binding site of NR1 potentiate NR1/NR3 receptor function up to 25-fold, but inhibition or mutation of the NR3 glycine binding site reduces or abolishes receptor activation. Thus, glycine bound to the NR1 subunit causes auto-inhibition of NR1/NR3 receptors whereas glycine binding to the NR3 subunits is required for opening of the ion channel. Our results establish differential roles of the high-affinity NR3 and low-affinity NR1 glycine-binding sites in excitatory glycine receptor function.