Transcriptional repressor which binds neuron-restrictive silencer element (NRSE) and represses neuronal gene transcription in non-neuronal cells. Restricts the expression of neuronal genes by associating with two distinct corepressors, SIN3A and RCOR1, which in turn recruit histone deacetylase to the promoters of REST-regulated genes. Mediates repression by recruiting the BHC complex at RE1/NRSE sites which acts by deacetylating and demethylating specific sites on histones, thereby acting as a chromatin modifier. Transcriptional repression by REST-CDYL via the recruitment of histone methyltransferase EHMT2 may be important in transformation suppression. Represses the expression of SRRM4 in non-neural cells to prevent the activation of neural-specific splicing events and to prevent production of REST isoform 3. Repressor activity may be inhibited by forming heterodimers with isoform 3, thereby preventing binding to NRSE or binding to corepressors and leading to derepression of target genes. Also maintains repression of neuronal genes in neural stem cells, and allows transcription and differentiation into neurons by dissociation from RE1/NRSE sites of target genes. Thereby is involved in maintaining the quiescent state of adult neural stem cells and preventing premature differentiation into mature neurons.