Changes in nuclear Ca²⁺ homeostasis activate specific gene expression programs and are central to the acquisition and storage of information in the brain. DREAM (downstream regulatory element antagonist modulator), also known as calsenilin/KChIP-3 (K⁺ channel interacting protein 3), is a Ca²⁺-binding protein that binds DNA and represses transcription in a Ca²⁺-dependent manner. To study the function of DREAM in the brain, we used transgenic mice expressing a Ca²⁺-insensitive/CREB-independent dominant active mutant DREAM (daDREAM). Using genome-wide analysis, we show that DREAM regulates the expression of specific activity-dependent transcription factors in the hippocampus, including Npas4, Nr4a1, Mef2c, JunB, and c-Fos. Furthermore, DREAM regulates its own expression, establishing an autoinhibitory feedback loop to terminate activity-dependent transcription. Ablation of DREAM does not modify activity-dependent transcription because of gene compensation by the other KChIP family members. The expression of daDREAM in the forebrain resulted in a complex phenotype characterized by loss of recurrent inhibition and enhanced long-term potentiation (LTP) in the dentate gyrus and impaired learning and memory. Our results indicate that DREAM is a major master switch transcription factor that regulates the on/off status of specific activity-dependent gene expression programs that control synaptic plasticity, learning, and memory.