The majority of fast synaptic inhibition in the brain is mediated by benzodiazepine-sensitive α1-subunit-containing GABA type A receptors (GABA(A)Rs); however, our knowledge of the mechanisms neurons use to regulate their synaptic accumulation is rudimentary. Using immunoprecipitation, we demonstrate that GABA(A)Rs and gephyrin are intimately associated at inhibitory synapses in cultured rat neurons. In vitro we reveal that the E-domain of gephyrin directly binds to the α1 subunit with an affinity of ∼20 μm, mediated by residues 360-375 within the intracellular domain of this receptor subunit. Mutating residues 360-375 decreases both the accumulation of α1-containing GABA(A)Rs at gephyrin-positive inhibitory synapses in hippocampal neurons and the amplitude of mIPSCs. We also demonstrate that the affinity of gephyrin for the α1 subunit is modulated by Thr375, a putative phosphorylation site. Mutation of Thr375 to a phosphomimetic, negatively charged amino acid decreases both the affinity of the α1 subunit for gephyrin, and therefore receptor accumulation at synapses, and the amplitude of mIPSCs. Finally, single-particle tracking reveals that gephyrin reduces the diffusion of α1-subunit-containing GABA(A)Rs specifically at inhibitory synapses, thereby increasing their confinement at these structures. Our results suggest that the direct binding of gephyrin to residues 360-375 of the α1 subunit and its modulation are likely to be important determinants for the stabilization of GABA(A)Rs at synaptic sites, thereby modulating the strength of synaptic inhibition.