We have examined the molecular mechanism of rapid inactivation gating in a mouse Shal K+ channel (mKv4.1). The results showed that inactivation of these channels follows a complex time course that is well approximated by the sum of three exponential terms. Truncation of an amphipathic region at the N-terminus (residues 2-71) abolished the rapid phase of inactivation (r = 16 ms) and altered voltage-dependent gating. Surprisingly, these effects could be mimicked by deletions affecting the hydrophilic C-terminus. The sum of two exponential terms was sufficient to describe the inactivation of deletion mutants. In fact, the time constants corresponded closely to those of the intermediate and slow phases of inactivation observed with wild-type channels. Further analysis revealed that several basic amino acids at the N-terminus do not influence inactivation, but a positively charged domain at the C-terminus (amino acids 420-550) is necessary to support rapid inactivation. Thus, the amphipathic N-terminus and the hydrophilic C-terminus of mKv4.1 are essential determinants of inactivation gating and may interact with each other to maintain the N-terminal inactivation gate near the inner mouth of the channel. Furthermore, this inactivation gate may not behave like a simple open-channel blocker because channel blockade by internal tetraethylammonium was not associated with slower current decay and an elevated external K+ concentration retarded recovery from inactivation.