Abstract The kainate receptors GluK1-3 belong to the family of ionotropic glutamate receptors and are essential for fast excitatory neurotransmission in the brain and associated with neurological and psychiatric diseases. How these receptors can be modulated by small molecule agents is not well-understood, especially for GluK3. We show that the positive allosteric modulator BPAM344 can be used to establish robust calcium-sensitive fluorescence-based assays at GluK1-3 for testing agonists, antagonists, and positive allosteric modulators. The EC 50 of BPAM344 for potentiating the response of 100 µM kainate was determined to 26.3 µM at GluK1, 75.4 µM at GluK2, and 639 µM at GluK3. In the presence of 150 µM BPAM344, domoate was found to be a potent agonist at GluK1 and GluK2 with EC 50 of 0.77 µM and 1.33 µM, respectively. At GluK3, domoate acts as a very weak agonist or antagonist with IC 50 of 14.5 µM, in the presence of 500 µM BPAM344 and 100 µM kainate. Using H523A mutated GluK3, we determined the first dimeric structure of the ligand-binding domain by X-ray crystallography, allowing location of BPAM344, zinc, sodium, and chloride ion binding sites at the dimer interface. Molecular dynamics simulations support the stability of the ion sites as well as the involvement of Asp761, Asp790, and Glu797 in binding of zinc ions. Using electron microscopy, we show that in the presence of glutamate and BPAM344, full-length GluK3 adopts a dimer-of-dimers arrangement. This study may contribute to unravelling the potential of kainate receptors as targets for treatment of brain diseases.