The ability to control and manipulate neuronal activity within an intact mammalian brain is of key importance for mapping functional connectivity and for dissecting the neural circuitry underlying behaviors. We have previously generated transgenic mice that express channelrhodopsin-2 for light-induced activation of neurons and mapping of neural circuits. Here we describe transgenic mice that express halorhodopsin (NpHR), a light-driven chloride pump that can be used to silence neuronal activity via light. Using the Thy-1 promoter to target NpHR expression to neurons, we found that neurons in these mice expressed high levels of NpHR-YFP and that illumination of cortical pyramidal neurons expressing NpHR-YFP led to rapid, reversible photoinhibition of action potential firing in these cells. However, NpHR-YFP expression led to the formation of numerous intracellular blebs, which may disrupt neuronal function. Labeling of various subcellular markers indicated that the blebs arise from retention of NpHR-YFP in the endoplasmic reticulum. By improving the signal peptide sequence and adding an ER export signal to NpHR-YFP, we eliminated the formation of blebs and dramatically increased the membrane expression of NpHR-YFP. Thus, the improved version of NpHR should serve as an excellent tool for neuronal silencing in vitro and in vivo.