The molecular mechanisms controlling the subunit composition of glutamate receptors are crucial for the formation of neural circuits and for the long-term plasticity underlying learning and memory. Here we use the Drosophila neuromuscular junction (NMJ) to examine how specific receptor subtypes are recruited and stabilized at synaptic locations. In flies, clustering of ionotropic glutamate receptors (iGluRs) requires Neto (Neuropillin and Tolloid-like), a highly conserved auxiliary subunit that is essential for NMJ assembly and development. Drosophila neto encodes two isoforms, Neto-α and Neto-β, with common extracellular parts and distinct cytoplasmic domains. Mutations that specifically eliminate Neto-β or its intracellular domain were generated. When Neto-β is missing or is truncated, the larval NMJs show profound changes in the subtype composition of iGluRs due to reduced synaptic accumulation of the GluRIIA subunit. Furthermore, neto-β mutant NMJs fail to accumulate p21-activated kinase (PAK), a critical postsynaptic component implicated in the synaptic stabilization of GluRIIA. Muscle expression of either Neto-α or Neto-β rescued the synaptic transmission at neto null NMJs, indicating that Neto conserved domains mediate iGluRs clustering. However, only Neto-β restored PAK synaptic accumulation at neto null NMJs. Thus, Neto engages in intracellular interactions that regulate the iGluR subtype composition by preferentially recruiting and/or stabilizing selective receptor subtypes.