Despite 50+ years of use as anxiolytics, anti-convulsants, and sedative/hypnotic agents, the mechanisms underlying benzodiazepine (BZD) tolerance are poorly understood. BZDs potentiate the actions of GABA, the primary inhibitory neurotransmitter in the adult brain, through positive allosteric modulation of γ2 subunit containing GABA type A receptors (GABAARs). Sustained treatment with BZD drugs is intimately associated with the development of tolerance, dependence, withdrawal and addiction. BZD efficacy diminishes after prolonged or high dose acute exposure, with tolerance to the sedative/hypnotic effects forming most quickly. We investigated the adaptive mechanisms occurring during initial exposure to the classical BZD, Diazepam (DZP), and the molecular signature of the mouse brain during established sedative tolerance. We found cultured neurons treated 24 h with DZP presented no change in surface or synaptic levels of γ2-GABAARs. In contrast, both γ2 and the key inhibitory synaptic scaffolding protein gephyrin levels were decreased after a single DZP treatment in vitro and in vivo. Live-imaging and label-free quantitative proteomics further revealed alterations in γ2 subunit surface trafficking, internalization and lysosomal targeting. In comparison, mice treated seven days with DZP had altered GABAAR subunit composition, reduced responsiveness to DZP, and tonic inhibition was diminished. Furthermore, DZP increased excitatory NMDA receptor subunit levels and function. State of the art mass spectrometry experiments revealed increased CaMKII subunits, which are positive regulators of NMDA receptors and involved in tolerance to other drugs. Downstream bioinformatics analysis confirmed robust synaptic plasticity after DZP. Together, we describe a time-dependent downregulation of synaptic GABAAR function after initial DZP exposure followed by an adaptive increase in excitatory neurotransmission, neuronal remodeling and altered synaptic GABAAR composition