The assembly of KCNQ1 with KCNE1 (E1) generates the delayed rectifier current IKs in the heart. IKs is regulated via Gq11-coupled receptors and the inhibition seen after phospholipase-C activation is now thought to occur from membrane phosphatidylinositol (4,5) bisphosphate (PIP2) depletion. PIP2 can modulate IKs by acting to shift the voltage dependence of channel activation (V0.5) towards hyperpolarized potentials, increase the rate of activation and slow the rate of deactivation (Loussouarn et al. 2003; Park et al. 2005). It is not clear how KCNQ1 recognises PIP2 and specifically which residues are involved. Using biochemical techniques, we have identified a cluster of basic residues in the C-terminus of KCNQ1 (K354, K358, R360 and K362) that appear to be critical for PIP2 binding. Using whole cell patch clamp we have investigated the effect of mutating these basic residues individually, or in combination, to alanine on the biophysical properties of IKs. Data are presented as mean ± S.E.M., and statistical comparisons were made using the Student’s t-test. KCNQ1-GFP+E1 (n=15) produced currents with a V0.5 of 13.6±1.2 mV and activation and deactivation rates, at +40 mV, of 1366.7±93.5 and 950.2±52.6 ms respectively. In general, the mutation of basic residues individually, or in combination, acted to shift the V0.5 towards depolarised potentials, slow the rate of activation and increase the rate of deactivation. In particular, R360A-GFP+E1 (n=8) and the double mutant K358A/R360A-GFP+E1 (n=6) produced currents with depolarising shifts (P<0.05) in the V0.5 (57.3±5.4 and 65.1±3.0 mV). These mutants also had slowed (P<0.05) activation (2455.9±219.3 and 2421.4±179.8 ms) and increased (P<0.05) deactivation rates (502.8±44.5 and 306±37.0 ms). In addition, the intracellular application of a water-soluble form of PIP2 (diC8-PIP2) (25 μM) to KCNQ1-GFP+E1 (n=9) resulted in a hyperpolarising shift (P<0.05) in the V0.5 (-4.5±1.2 mV), and changes (P<0.05) in the rate of channel activation (827.3±80.3 ms) but not deactivation (P>0.05) (1030.1±66.4 ms). In contrast, the intracellular application of diC8-PIP2 (25 μM) to both R360A-GFP+E1 (n=7) and K358A/R360A-GFP+E1 (n=6) did not result in significant (P>0.05) changes in the V0.5 (54±2.9 and 63.8±4.2 mV), or rates of channel activation (2592±192.9 and 2220±155.7 ms) or deactivation (536.9±50.5 and 284.7±16.5 ms). In conclusion, we have identified a cluster of basic residues in the proximal C-terminus of KCNQ1 that appear to be critical for mediating the effects of PIP2 on IKs channel function.