Voltage-gated potassium (Kv) channels control action potential repolarization, interspike membrane potential, and action potential frequency in excitable cells. It is thought that the combinatorial association between distinct a and b subunits determines whether Kv channels function as non-inactivating delayed rectifiers or as rapidly inactivating A-type channels. It is show that membrane lipids can convert A-type channels into delayed rectifiers, and vice versa. Phosphoinositides such as PIP2 remove N-type inactivation from A-type channels by immobilizing the inactivation domains. Conversely, arachidonic acid and its amide anandamide endow delayed rectifiers with rapid voltage-dependent inactivation by inducing collapse of the selectivity filter of the open pore. The bidirectional control of Kv channel gating by lipids is thought to provide a mechanism for the dynamic regulation of electrical signaling in the nervous system.