The βγ subunits of GTP-binding proteins (G_βγ) activate the muscarinic K⁺ channel (K_ACh) in heart by direct binding to both of its component subunits. K_ACh channels can also be gated by internal Na⁺ ions. Both activation mechanisms show dependence on hydrolysis of intracellular ATP. We report that phosphatidylinositol 4,5-bisphosphate (PIP₂) mimics the ATP effects and that depletion or block of PIP₂ retards the stimulatory effects of G_βγ subunits or Na⁺ ions on channel activity, effects that can be reversed by restoring PIP₂. Thus, regulation of K_ACh channel activity may be crucially dependent on PIP₂ and phosphatidylinositol signaling. These striking functional results are in agreement with in vitro biochemical studies on the PIP₂ requirement for G_βγ stimulation of G protein receptor kinase activity, thus implicating phosphatidylinositol phospholipids as a potential control point for G_βγ-mediated signal transduction.