K+/Cl- cotransporter 2 (KCC2) is selectively expressed in the adult nervous system and allows neurons to maintain low intracellular Cl- levels. Thus, KCC2 activity is an essential prerequisite for fast hyperpolarizing synaptic inhibition mediated by type A γ-aminobutyric acid (GABAA) receptors, which are Cl--permeable, ligand-gated ion channels. Consistent with this, deficits in the activity of KCC2 lead to epilepsy and are also implicated in neurodevelopmental disorders, neuropathic pain, and schizophrenia. Accordingly, there is significant interest in developing activators of KCC2 as therapeutic agents. To provide insights into the cellular processes that determine KCC2 activity, we have investigated the mechanism by which N-ethylmaleimide (NEM) enhances transporter activity using a combination of biochemical and electrophysiological approaches. Our results revealed that, within 15 min, NEM increased cell surface levels of KCC2 and modulated the phosphorylation of key regulatory residues within the large cytoplasmic domain of KCC2 in neurons. More specifically, NEM increased the phosphorylation of serine 940 (Ser-940), whereas it decreased phosphorylation of threonine 1007 (Thr-1007). NEM also reduced with no lysine (WNK) kinase phosphorylation of Ste20-related proline/alanine-rich kinase (SPAK), a kinase that directly phosphorylates KCC2 at residue Thr-1007. Mutational analysis revealed that Thr-1007 dephosphorylation mediated the effects of NEM on KCC2 activity. Collectively, our results suggest that compounds that either increase the surface stability of KCC2 or reduce Thr-1007 phosphorylation may be of use as enhancers of KCC2 activity.