Activity-dependent gene transcription, including that of the brain-derived neurotrophic factor (Bdnf) gene, has been implicated in various cognitive functions. We previously demonstrated that mutant mice with selective disruption of activity-dependent BDNF expression (BDNF-KIV mice) exhibit deficits in GABA-mediated inhibition in the prefrontal cortex (PFC). Here, we show that disruption of activity-dependent BDNF expression impairs BDNF-dependent late-phase long-term potentiation (L-LTP) in CA1, a site of hippocampal output to the PFC. Interestingly, early-phase LTP and conventional L-LTP induced by strong tetanic stimulation were completely normal in BDNF-KIV mice. In parallel, attenuation of activity-dependent BDNF expression significantly impairs spatial memory reversal and contextual memory extinction, two executive functions that require intact hippocampal-PFC circuitry. In contrast, spatial and contextual memory per se were not affected. Thus, activity-dependent BDNF expression in the hippocampus and PFC may contribute to cognitive and behavioral flexibility. These results suggest distinct roles for different forms of L-LTP and provide a link between activity-dependent BDNF expression and behavioral perseverance, a hallmark of several psychiatric disorders.