Brain-derived neurotrophic factor (BDNF)--a member of a small family of secreted proteins that includes nerve growth factor, neurotrophin 3 and neurotrophin 4--has emerged as a key regulator of neural circuit development and function. The expression, secretion and actions of BDNF are directly controlled by neural activity, and secreted BDNF is capable of mediating many activity-dependent processes in the mammalian brain, including neuronal differentiation and growth, synapse formation and plasticity, and higher cognitive functions. This Review summarizes some of the recent progress in understanding the cellular and molecular mechanisms underlying neurotrophin regulation of neural circuits. The focus of the article is on BDNF, as this is the most widely expressed and studied neurotrophin in the mammalian brain.