Effective GABAergic inhibition requires the maintenance of the chloride gradient, which is primarily accomplished by the K+/Cl- co-transporter, KCC2, in the adult brain. Alterations in KCC2 expression and function have been demonstrated under pathological conditions and in specific cell types under physiological conditions, including following stress. The body’s physiological response to stress is mediated by the hypothalamic-pituitary-adrenal (HPA) axis. Corticotropin-releasing hormone (CRH) neurons in the paraventricular nucleus (PVN) of the hypothalamus are at the apex of HPA axis control and these neurons are tightly regulated by robust GABAergic inhibition. In response to a stressful event, the inhibitory control over CRH neurons, arising from multiple brain regions and mediated by numerous receptor subtypes, must be very rapidly lifted. Here we demonstrate that following acute restraint stress in mice, there is a dephosphorylation of KCC2 residue Ser940, which regulates the surface expression and function of KCC2, and downregulation of total KCC2 expression in the PVN. In addition, we demonstrate excitatory actions of GABA following acute restraint stress on CRH neurons. Our data suggest that collapsing the chloride gradient, by dephosphorylation and downregulation of KCC2, alleviates the inhibitory GABAergic control of CRH neurons which is necessary to mount the physiological response to stress. In contrast, following acute restraint stress in mice, we do not observe alterations in KCC2 expression in the hippocampus. Interestingly, following chronic restraint stress, there is a dephosphorylation of KCC2 residue Ser940 and a downregulation of KCC2 in the hippocampus, associated with a shift in EGABA and increased excitability of CA1 pyramidal neurons. These alterations in KCC2 expression may play a role in mediating the known increased neuronal excitability in the hippocampus following chronic stress. These data demonstrate rapid changes in KCC2 function and dynamic changes in GABAergic inhibition in a brain region-specific manner following both acute and chronic stress. Furthermore, alterations in KCC2 may have implications for stress-related disorders, including epilepsy and depression.