During neuronal maturation, the neuron-specific K-Cl co-transporter KCC2 lowers the intracellular chloride and thereby renders GABAergic transmission hyperpolarizing. Independently of its role as a co-transporter, KCC2 plays a crucial role in the maturation of dendritic spines, most probably via an interaction with the cytoskeleton-associated protein 4.1N. In this study, we show that neural-specific overexpression of KCC2 impairs the development of the neural tube- and neural crest-related structures in mouse embryos. At early stages (E9.5-11.5), the transgenic embryos had a thinner neural tube and abnormal body curvature. They displayed a reduced neuronal differentiation and altered neural crest cell pattern. At later stages (E11.5-15.5), the transgenic embryos had smaller brain structures and a distinctive cleft palate. Similar results were obtained using overexpression of a transport-inactive N-terminal-deleted variant of KCC2, implying that the effects were not dependent on KCC2's role as a K-Cl co-transporter. Interestingly, the neural tube of transgenic embryos had an aberrant cytoplasmic distribution of 4.1N and actin. This was corroborated in a neural stem cell line with ectopic expression of KCC2. Embryo phenotype and cell morphology were unaffected by a mutated variant of KCC2 which is unable to bind 4.1N. These results point to a role of KCC2 in neuronal differentiation and migration during early development mediated by its direct structural interactions with the neuronal cytoskeleton.