OBJECTIVE Select neuroactive steroids tune neural activity by modulating excitatory and inhibitory neurotransmission, including the endogenous cholesterol metabolite 24(S)-hydroxycholesterol (24(S)-HC), which is an N-methyl-d-aspartate (NMDA) receptor positive allosteric modulator (PAM). NMDA receptor PAMs are potentially an effective pharmacotherapeutic strategy to treat conditions associated with NMDA receptor hypofunction. METHODS Using in vitro and in vivo electrophysiological recording experiments and behavioural approaches, we evaluated the effect of SAGE-718, a novel neuroactive steroid NMDA receptor PAM currently in clinical development for the treatment of cognitive impairment, on NMDA receptor function and endpoints that are altered by NMDA receptor hypoactivity and assessed its safety profile. RESULTS SAGE-718 potentiated GluN1/GluN2A-D NMDA receptors with equipotency and increased NMDA receptor excitatory postsynaptic potential (EPSP) amplitude without affecting decay kinetics in striatal medium spiny neurons. SAGE-718 increased the rate of unblock of the NMDA receptor open channel blocker ketamine on GluN1/GluN2A in vitro and accelerated the rate of return on the ketamine-evoked increase in gamma frequency band power, as measured with electroencephalogram (EEG), suggesting that PAM activity is driven by increased channel open probability. SAGE-718 ameliorated deficits due to NMDA receptor hypofunction, including social deficits induced by subchronic administration of phencyclidine, and behavioural and electrophysiological deficits from cholesterol and 24(S)-HC depletion caused by 7-dehydrocholesterol reductase inhibition. Finally, SAGE-718 did not produce epileptiform activity in a seizure model or neurodegeneration following chronic dosing. CONCLUSIONS These findings provide strong evidence that SAGE-718 is a neuroactive steroid NMDA receptor PAM with a mechanism that is well suited as a treatment for conditions associated with NMDA receptor hypofunction.