The K⁺/Cl^– cotransporter (KCC2) allows adult neurons to maintain low intracellular Cl^– levels, which are a prerequisite for efficient synaptic inhibition upon activation of γ-aminobutyric acid receptors. Deficits in KCC2 activity are implicated in epileptogenesis, but how increased neuronal activity leads to transporter inactivation is ill defined. In vitro, the activity of KCC2 is potentiated via phosphorylation of serine 940 (S940). Here we have examined the role this putative regulatory process plays in determining KCC2 activity during status epilepticus (SE) using knockin mice in which S940 is mutated to an alanine (S940A). In wild-type mice, SE induced by kainate resulted in dephosphorylation of S940 and KCC2 internalization. S940A homozygotes were viable and exhibited comparable basal levels of KCC2 expression and activity relative to WT mice. However, exposure of S940A mice to kainate induced lethality within 30 min of kainate injection and subsequent entrance into SE. We assessed the effect of the S940A mutation in cultured hippocampal neurons to explore the mechanisms underlying this phenotype. Under basal conditions, the mutation had no effect on neuronal Cl^– extrusion. However, a selective deficit in KCC2 activity was seen in S940A neurons upon transient exposure to glutamate. Significantly, whereas the effects of glutamate on KCC2 function could be ameliorated in WT neurons with agents that enhance S940 phosphorylation, this positive modulation was lost in S940A neurons. Collectively our results suggest that phosphorylation of S940 plays a critical role in potentiating KCC2 activity to limit the development of SE.