Activating Transcription Factor 4 (ATF4) has been postulated as a key regulator of learning and memory. We previously reported that specific hippocampal ATF4 downregulation causes deficits in synaptic plasticity and memory and reduction of glutamatergic functionality. Here we extend our studies to address ATF4's role in neuronal excitability. We find that long-term ATF4 knockdown in cultured rat hippocampal neurons significantly increases the frequency of spontaneous action potentials. This effect is associated with decreased functionality of metabotropic GABA receptors (GABARs). Knocking down ATF4 results in significant reduction of GABAR-induced GIRK currents and increased mIPSC frequency. Furthermore, reducing ATF4 significantly decreases expression of membrane-exposed, but not total, GABAR 1a and 1b subunits, indicating that ATF4 regulates GABAR trafficking. In contrast, ATF4 knockdown has no effect on surface expression of GABAR2s, several GABAR-coupled ion channels or β2 and γ2 GABARs. Pharmacologic manipulations confirmed the relationship between GABAR functionality and action potential frequency in our cultures. Specifically, the effects of ATF4 downregulation cited above are fully rescued by transcriptionally active, but not by transcriptionally inactive, shRNA-resistant, ATF4. We previously reported that ATF4 promotes stabilization of the actin-regulatory protein Cdc42 by a transcription-dependent mechanism. To test the hypothesis that this action underlies the mechanism by which ATF4 loss affects neuronal firing rates and GABAR trafficking, we downregulated Cdc42 and found that this phenocopies the effects of ATF4 knockdown on these properties. In conclusion, our data favor a model in which ATF4, by regulating Cdc42 expression, affects trafficking of GABARs, which in turn modulates the excitability properties of neurons. GABA receptors (GABARs), the metabotropic receptors for the inhibitory neurotransmitter GABA, have crucial roles in controlling the firing rate of neurons. Deficits in trafficking/functionality of GABARs have been linked to a variety of neurological and psychiatric conditions, including epilepsy, anxiety, depression, schizophrenia, addiction, and pain. Here we show that GABARs trafficking is influenced by Activating Transcription Factor 4 (ATF4), a protein that has a pivotal role in hippocampal memory processes. We found that ATF4 downregulation in hippocampal neurons reduces membrane-bound GABAR levels and thereby increases intrinsic excitability. These effects are mediated by loss of the small GTPase Cdc42 following ATF4 downregulation. These findings reveal a critical role for ATF4 in regulating the modulation of neuronal excitability by GABARs.