To understand the genetic mechanism controlling the expression of the NMDA subtype of glutamate receptors during neuronal differentiation, we studied activation of the N-methyl-D-aspartate receptor subunit 1 (NR1) gene and the role of the repressor element-1 (RE1) element in NR1 promoter activation. Following neuronal differentiation of P19 embryonic carcinoma cells, the NR1 transcription rate and mRNA level were significantly increased, while the nuclear level of the repressor RE1 silencing transcription factor (REST)/neuron-restriction silencer factor (NRSF) was reduced. Nuclear REST/NRSF from undifferentiated cells formed a large complex with the NR1 RE1 element. While this complex was significantly reduced after the differentiation, REST/NRSF from differentiated cells formed a new, faster migrating complex. In transient transfections, deletion of the RE1 element increased activity of the 5.4-kb NR1 promoter sixfold in undifferentiated cells, but only induced approximately 1.4-fold increase in differentiated cells. Forced expression of REST/NRSF in differentiated cells suppressed the promoter, while forced expression of a dominant-negative REST/NRSF induced promoter activity as well as the mRNA of the NR1 gene in undifferentiated cells. In stable transfectants, the wild-type promoter showed a robust increase in activity following differentiation in a pattern similar to the NR1 mRNA increase. Conversely, the promoter lacking the RE1 element showed only a moderate increase. Our data suggest that the NR1 gene up-regulation during neuronal differentiation is controlled by its promoter activation, which is largely determined by the interaction between the RE1 element and the repressor REST/NRSF.