Many voltage-dependent K+ channels open when the membrane is depolarized and then rapidly close by a process called inactivation. Neurons use inactivating K+ channels to modulate their firing frequency. In Shaker-type K+ channels, the inactivation gate, which is responsible for the closing of the channel, is formed by the channel's cytoplasmic amino terminus. Here we show that the central cavity and inner pore of the K+ channel form the receptor site for both the inactivation gate and small-molecule inhibitors. We propose that inactivation occurs by a sequential reaction in which the gate binds initially to the cytoplasmic channel surface and then enters the pore as an extended peptide. This mechanism accounts for the functional properties of K+ channel inactivation and indicates that the cavity may be the site of action for certain drugs that alter cation channel function.