Neurons resembling the spiral ganglion neurons (SGNs) of the auditory nerve can be generated from embryonic stem cells through induced over-expression of the transcription factor Neurogenin-1 (Neurog1). While recapitulating this developmental pathway produces glutamatergic, bipolar neurons reminiscent of SGNs, these neurons are functionally immature, being characterized by a depolarized resting potential and limited excitability. We explored the effects of two neurotrophins known to be present in the inner ear, brain derived neurotrophic factor (BDNF) and neurotrophin-3 (NT-3), on the electrophysiology of neurons following Neurog1-induction. Our data reveal a significant reduction in resting membrane potential (RMP) following neurotrophin exposure, with BDNF producing a more robust effect than NT-3. This effect was accompanied by a profound and specific upregulation of the KCNQ4 subtype, where a 9-fold increase was observed with quantitative PCR. The other neuronally-expressed KCNQ subtypes (2, 3, and 5) exhibited upregulation which was 3-fold or less in magnitude. Quantitative immunohistochemistry confirmed the increase in KCNQ4 expression at the protein level. The present data show a novel link between BDNF and KCNQ4 expression, yielding insight into the restricted expression pattern of a channel known to play a special roles in setting the resting potential of auditory cells and in the etiology of progressive high frequency hearing loss.