Arachidonic acid (AA) and its metabolites play a dual role as intracellular second messengers and as transcellular mediators of neural activity. We have previously shown that AA increases cytosolic Ca2+ in oligodendrocytes. In this work, we studied the effects of AA and other fatty acids on whole cell K+ currents of cultured rat oligodendrocytes using the patch-clamp technique. We found that 1) AA decreased the current amplitudes of both the inwardly rectifying K+ current (IKir) and the outward K+ currents (IKo) resulting in membrane depolarization; 2) AA also induced IKo current inactivation/blocked state; 3) AA appeared to act directly on K+ channels and not indirectly via its metabolic products, activation of protein kinase C, or by generation of oxygen free radicals. We have thus demonstrated an additional mechanism for AA-induced signaling in oligodendrocytes, i.e., via modulation of K+ conductances leading to membrane depolarization. The latter has been shown to influence protein phosphorylation and perhaps other important functional output of oligodendrocytes.