Neuron-restrictive silencer element (NRSE) has been identified in multiple neuron-specific genes. This element has been shown to mediate repression of neuronal gene transcription in nonneuronal cells. A palindromic NRSE (NRSEBDNF) is present in the proximal region of brain-derived neurotrophic factor (BDNF) promoter II. Using in vitro binding assays, we establish that the upper half-site is largely responsible for the NRSEBDNF activity. To delineate the in vivo role of NRSE in the regulation of rat BDNF gene, promoter constructs with intact and mutated NRSEBDNF were introduced into transgenic mice. Our data show that NRSEBDNF is controlling the activity of BDNF promoters I and II in the brain, thymus, and lung, i.e. in the tissues in which the intact reporter gene and endogenous BDNF mRNAs are expressed. Mutation of NRSEBDNF did not lead to the ectopic activation of the reporter gene in any other nonneural tissues. In the brain, NRSEBDNF is involved in the repression of basal and kainic acid-induced expression from BDNF promoters I and II in neurons. However, NRSEBDNF does not control the activity of the BDNF gene in nonneuronal cells of brain.