Rett syndrome (RTT) is an X-linked neurodevelopmental disorder linked to heterozygous de novo mutations in the MECP2 gene. MECP2 encodes methyl-CpG-binding protein 2 (MeCP2), which represses gene transcription by binding to 5-methylcytosine residues in symmetrically positioned CpG dinucleotides. Direct MeCP2 targets underlying RTT pathogenesis remain largely unknown. Here, we report that FXYD1, which encodes a transmembrane modulator of Na(+), K(+) -ATPase activity, is elevated in frontal cortex (FC) neurons of RTT patients and Mecp2-null mice. Increasing neuronal FXDY1 expression is sufficient to reduce dendritic arborization and spine formation, hallmarks of RTT neuropathology. Mecp2-null mouse cortical neurons have diminished Na(+),K(+)-ATPase activity, suggesting that aberrant FXYD1 expression contributes to abnormal neuronal activity in RTT. MeCP2 represses Fxyd1 transcription through direct interactions with sequences in the Fxyd1 promoter that are methylated in FC neurons. FXYD1 is therefore a MeCP2 target gene whose de-repression may directly contribute to RTT neuronal pathogenesis.