The polarity of neurotransmission mediated by the gamma-amino butyric acid (GABA) type A receptor depends crucially on intracellular chloride concentration, which is largely determined by the expression and function of cation/chloride co-transporters. Recent evidence shows how both activity and neurotrophic factors can affect GABAergic transmission in the mammalian central nervous system through their effects on the neuron-specific chloride-extruding transporter KCC2. In particular, GABAergic neurotransmission early in development, sustained neuronal activity in mature networks and brain-derived neurotrophic factor each modulate the expression or function of KCC2. The resulting changes in intracellular chloride concentration alter the nature or strength of fast GABAergic neurotransmission, profoundly affecting the development and function of neuronal networks.