GABA- and glycine-induced depolarization is thought to provide important developmental signals, but the role of the underlying chloride gradient has not been examined from the onset of development. We therefore overexpressed globally the potassium-chloride cotransporter 2 (KCC2) in newly fertilized zebrafish embryos to reverse the chloride gradient. This rendered glycine hyperpolarizing in all neurons, tested at the time that motor behaviors (but not native KCC2) first appear. KCC2 overexpression resulted in fewer mature spontaneously active spinal neurons, more immature silent neurons, and disrupted motor activity. We observed fewer motoneurons and interneurons, a reduction in the elaboration of axonal tracts, and smaller brains and spinal cords. However, we observed no increased apoptosis and a normal complement of sensory neurons, glia, and progenitors. These results suggest that chloride-mediated excitation plays a crucial role in promoting neurogenesis from the earliest stages of embryonic development.