General anesthetics exert many of their CNS actions by binding to and modulating membrane-embedded pentameric ligand-gated ion channels (pLGICs). The structural mechanisms underlying how anesthetics modulate pLGIC function remain largely unknown. GLIC, a prokaryotic pLGIC homologue, is inhibited by general anesthetics, suggesting anesthetics stabilize a closed channel state, but in anesthetic-bound GLIC crystal structures the channel appears open. Here, using functional GLIC channels expressed in oocytes, we examined whether propofol induces structural rearrangements in the GLIC transmembrane domain (TMD). Residues in the GLIC TMD that frame intrasubunit and intersubunit water-accessible cavities were individually mutated to cysteine. We measured and compared the rates of modification of the introduced cysteines by sulfhydryl-reactive reagents in the absence and presence of propofol. Propofol slowed the rate of modification of L240C (intersubunit) and increased the rate of modification of T254C (intrasubunit), indicating that propofol binding induces structural rearrangements in these cavities that alter the local environment near these residues. Propofol acceleration of T254C modification suggests that in the resting state propofol does not bind in the TMD intrasubunit cavity as observed in the crystal structure of GLIC with bound propofol (Nury, H., Van Renterghem, C., Weng, Y., Tran, A., Baaden, M., Dufresne, V., Changeux, J. P., Sonner, J. M., Delarue, M., and Corringer, P. J. (2011) Nature 469, 428-431). In silico docking using a GLIC closed channel homology model suggests propofol binds to intersubunit sites in the TMD in the resting state. Propofol-induced motions in the intersubunit cavity were distinct from motions associated with channel activation, indicating propofol stabilizes a novel closed state.