The neuron-restrictive silencer factor/RE1-silencing transcription factor (NRSF/REST) is a negative regulator of gene expression restricting the expression of neuronal genes to the nervous system. NRSF/REST is highly expressed in non-neuronal tissues like the lung. In previous work, we identified small-cell lung cancer (SCLC) cell lines with no detectable NRSF/REST expression that, as a consequence, expressed neuronal markers like L1-cell adhesion molecule (L1-CAM) and neural cell adhesion molecule (NCAM). The loss of NRSF/REST expression was linked to malignant progression; however, its mechanistic role remained elusive. Here, we show that NRSF/REST itself, rather than one of its regulated genes, acts like a classic tumour suppressor, being in part regulated by methylation. In SCLCs, NRSF/REST is positively regulated by CREB, with an NRSF/REST promoter fragment showing cell type specificity. Downstream, NRSF/REST directly regulates AKT2, in which NRSF/REST loss leads to an epidermal growth factor-mediated de-regulation of AKT-Serine473 phosphorylation, important for cellular proliferation and survival. Assaying anchorage-independent growth, we observed that with reduced NRSF/REST expression, proliferation was significantly enhanced, whereas NRSF/REST rescue decreased the potential of cells to grow anchorage independently. Our observations support the fact that NRSF/REST may act as an important modulator of malignant progression in SCLC.