Activity-induced modification of GABAergic transmission contributes to the plasticity of neural circuits. In the present work we found that prolonged postsynaptic spiking of hippocampal neurons led to a shift in the reversal potential of GABA-induced Cl- currents (E(Cl)) toward positive levels in a duration- and frequency-dependent manner. This effect was abolished by blocking cytosolic Ca2+ elevation and mimicked by releasing Ca2+ from internal stores. Activity- and Ca2+-induced E(Cl) shifts were larger in mature neurons, which express the K-Cl cotransporter KCC2 at high levels, and inhibition of KCC2 occluded the shifts. Overexpression of KCC2 in young cultured neurons, which express lower levels of KCC2 and have a more positive E(Cl), resulted in hyperpolarized E(Cl) similar to that of mature cells. Importantly, these young KCC2-expressing neurons became responsive to neuronal spiking and Ca2+ elevation by showing positive E(Cl) shifts. Thus, repetitive postsynaptic spiking reduces the inhibitory action of GABA through a Ca2+-dependent downregulation of KCC2 function.