We derive the action of 2D gravity from the two-cocycle of the Virasoro group by using a previously introduced method for constructing a dynamical system from a Lie group. A natural construction and explanation of the hidden SL(2, R)-Kac-Moody symmetry, of general applicability, is provided. We also show how the proper quantization goes beyond the ordinary co-adjoint orbit method, and the possible connection with the Poisson-Lie groups.