The neuron-restrictive silencer element (NRSE) has been identified in several neuronal genes and confers neuron specificity by silencing transcription in nonneuronal cells. NRSE is present in the promoter of the neuronal nicotinic acetylcholine receptor 2-subunit gene that determines its neuron-specific expression in the nervous system. Using transgenic mice, we show that NRSE may either silence or enhance transcription depending on the cellular context within the nervous system. In vitro in neuronal cells, NRSE activates transcription of synthetic promoters when located downstream in the 5 untranslated region, or at less than 50 bp upstream from the TATA box, but switches to a silencer when located further upstream. In contrast, in nonneuronal cells NRSE always functions as a silencer. Antisense RNA inhibition shows that the NRSE-binding protein REST contributes to the activation of transcription in neuronal cells.The mechanisms that account for transcriptional regulation in neurons are still poorly understood. Yet, increasing numbers of transcription factors (1-3) and DNA elements (4, 5) involved in neuron-specific transcription are now characterized. One of them, the neuron-restrictive silencer element (NRSE; ref. 6), also called RE (7), behaves as a regulatory sequence of several neuronal genes (8) by silencing transcription in nonneuronal cells (6,7,(9)(10)(11)(12)(13)(14). The silencing activity of NRSE was primarily studied by transient transfection assays in the promoter of the genes encoding type II sodium channel (NaII; 7) and SCG10 protein (6). It was also recognized in the genes encoding synapsin I (9), nicotinic acetylcholine receptor (nAChR) 2-subunit (5), Ng-CAM (11), m4 muscarinic receptor (12, 13), and choline acetyltransferase (ChAT; 14). On the basis of sequence homologies, Schoenherr et al. (8) recently identified about 20 genes carrying a NRSE-like sequence. Among these genes, 17 are expressed in the nervous system and in 10 of them, including the nAChR 2-subunit gene (5), NRSE is located in the 5Ј untranslated region (UTR) (ref. 15; see also refs. 16 and 17). Although important functional elements have already been found in the 5Ј UTR or in intragenic positions (4,(18)(19)(20), NRSE is, to our knowledge, the first element sharing a conserved intragenic position in several genes. The functional significance of such an unusual position remained to be explained.A transcription factor of the Gli-Krüppel zinc-finger family that binds to NRSE has recently been characterized in HeLa cells, and named neuron-restrictive silencer factor (NRSF; ref.15) or RE1 silencing transcription factor (REST; ref. 21, see also ref. 22). In vitro studies revealed that REST exhibits a transcriptional repressing activity on promoters that carry the NRSE sequence (15,21,23).In this work, we have analyzed the function of NRSE in the promoter of the mouse gene encoding the nAChR 2-subunit as well as the importance of its location within the promoter. In transgenic mice, we show that upon mutation of NRSE,...