The expression of the neuron-specific K+/Cl- cotransporter (KCC2) is restricted to the CNS and is strongly upregulated during neuronal maturation, yielding a low intracellular chloride concentration that is required for fast synaptic inhibition in adult neurons. To elucidate the mechanisms of KCC2 gene regulation, we analyzed the KCC2 (alias Slc12a5) promoter and proximal intron-1 regions and revealed 10 candidate transcription factor binding sites that are highly conserved in mammalian KCC2 genes. Here we focus on one of these factors, early growth response 4 (Egr4), which shows a similar developmental upregulation in CNS neurons as KCC2. KCC2 luciferase reporter constructs containing the Egr4 site (Egr4(KCC2)) were strongly induced by Egr4 overexpression in neuro-2a neuroblastoma cells and in cultured neurons. Egr4-mediated induction was decreased significantly by point-mutating the Egr4(KCC2). Insertion of Egr4(KCC2) into the KCC2 basal promoter in the endogenous reverse, but not in the opposite, orientation reestablished Egr4-mediated induction. Electrophoretic mobility shift assay confirmed specific Egr4 binding to Egr4(KCC2). Interference RNA-mediated knock-down of Egr4 and a dominant-negative isoform of Egr4 significantly inhibited KCC2 reporter induction and endogenous KCC2 expression in cultured neurons. Together, the results indicate an important role for Egr4 in the developmental upregulation of KCC2 gene expression.