Elevated levels of NH₄⁺ in the brain impair neuronal function. We studied the effects of NH₄⁺ on postsynaptic inhibition of cultured rat brain neurons using whole cell recording under nominally HCO₃^- free conditions. Application of NH₄⁺ shifted the reversal potentials for spontaneous inhibitory postsynaptic currents and currents elicited by dendritic GABA applications in a positive direction because [Cl^-]_i increased. The positive shift of the reversal potentials of GABA induced Cl^- currents was equal upon equimolar elevation of [NH₄⁺]_o or [K⁺]_o, respectively. The NH₄⁺ induced increase in [Cl^-]_i was reversed by an inhibitor of cation-anion cotransport, furosemide (0.1 mM), but not by bumetanide (0.01 mM) or by replacement of [Na⁺]_o by Li⁺. We conclude that KCC2 transports NH₄⁺ similar to K⁺. Despite this fact, the small increase of [NH₄⁺]_o during metabolic encephalopathies will barely elevate [Cl^-]_i. However an impairment of neuronal function may result because KCC2 provides a pathway to accumulate NH₄⁺ and, thereby, a continuous acid load to neurons.