NEAT1 is a highly and ubiquitously expressed long non-coding RNA (lncRNA) which serves as an important regulator of cellular stress response. However, the physiological role of NEAT1 in the central nervous system (CNS) is still poorly understood. In the current study, we addressed this by characterising the CNS function of the Neat1 knockout mouse model (Neat1-/- mice), using a combination of behavioural phenotyping, electrophysiology and expression analysis. RNAscope® in situ hybridisation revealed that in wild-type mice, Neat1 is expressed across the CNS regions, with high expression in glial cells and low expression in neurons. Loss of Neat1 in mice results in an inadequate reaction to physiological stress manifested as hyperlocomotion and panic escape response. In addition, Neat1-/- mice display deficits in social interaction and rhythmic patterns of activity but retain normal motor function and memory. Neat1-/- mice do not present with neuronal loss, overt neuroinflammation or gross synaptic dysfunction in the brain. However, cultured Neat1-/- neurons are characterised by hyperexcitability and dysregulated calcium homoeostasis, and stress-induced neuronal activity is also augmented in Neat1-/- mice in vivo. Gene expression analysis showed that Neat1 may act as a weak positive regulator of multiple genes in the brain. Furthermore, loss of Neat1 affects alternative splicing of genes important for the CNS function and implicated in neurological diseases. Overall, our data suggest that Neat1 is involved in stress signalling in the brain and fine-tunes the CNS functions to enable adaptive behaviour in response to physiological stress.