The mammalian brain exhibits diverse types of neural plasticity, including activity-dependent neurogenesis in the adult hippocampus. How transient activation of mature neurons leads to long-lasting modulation of adult neurogenesis is unknown. Here we identify Gadd45b as a neural activity-induced immediate early gene in mature hippocampal neurons. Mice with Gadd45b deletion exhibit specific deficits in neural activity-induced proliferation of neural progenitors and dendritic growth of newborn neurons in the adult hippocampus. Mechanistically, Gadd45b is required for activity-induced DNA demethylation of specific promoters and expression of corresponding genes critical for adult neurogenesis, including brain-derived neurotrophic factor and fibroblast growth factor. Thus, Gadd45b links neuronal circuit activity to epigenetic DNA modification and expression of secreted factors in mature neurons for extrinsic modulation of neurogenesis in the adult brain.