In Huntington's disease (HD), mutant huntingtin (mHtt) disrupts the normal transcriptional program of disease neurons by altering the function of several gene expression regulators such as Sp1. REST (Repressor Element-1 Silencing Transcription Factor), a key regulator of neuronal differentiation, is also aberrantly activated in HD by a mechanism that remains unclear. Here, we show that the level of REST mRNA is increased in HD mice and in NG108 cells differentiated into neuronal-like cells and expressing a toxic mHtt fragment. Using luciferase reporter gene assay, we delimited the REST promoter regions essential for mHtt-mediated REST upregulation and found that they contain Sp factor binding sites. We provide evidence that Sp1 and Sp3 bind REST promoter and interplay to fine-tune REST transcription. In undifferentiated NG108 cells, Sp1 and Sp3 have antagonistic effect, Sp1 acting as an activator and Sp3 as a repressor. Upon neuronal differentiation, we show that the amount and ratio of Sp1/Sp3 proteins decline, as does REST expression, and that the transcriptional role of Sp3 shifts toward a weak activator. Therefore, our results provide new molecular information to the transcriptional regulation of REST during neuronal differentiation. Importantly, specific knockdown of Sp1 abolishes REST upregulation in NG108 neuronal-like cells expressing mHtt. Our data together with earlier reports suggest that mHtt triggers a pathogenic cascade involving Sp1 activation, which leads to REST upregulation and repression of neuronal genes.