Ancillary beta-subunits regulate the voltage-dependence and the kinetics of Kv currents. The Kvbeta proteins bind pyridine nucleotides with high affinity but the role of cofactor binding in regulating Kv currents remains unclear. We found that recombinant rat Kvbeta 1.3 binds NADPH (K(d)=1.8+/-0.02 microM) and NADP(+) (K(d)=5.5+/-0.9 microM). Site-specific modifications at Tyr-307 and Arg-316 decreased NADPH binding; whereas, K(d) NADPH was unaffected by the R241L mutation. COS-7 cells transfected with Kv1.5 cDNA displayed non-inactivating currents. Co-transfection with Kvbeta1.3 accelerated Kv activation and inactivation and induced a hyperpolarizing shift in voltage-dependence of activation. Kvbeta-mediated inactivation of Kv currents was prevented by the Y307F and R316E mutations but not by the R241L substitution. Additionally, the R316E mutation weakened Kvalpha-beta interaction. Inactivation of Kv currents by Kvbeta:R316E was restored when excess NADPH was included in the patch pipette. These observations suggest that NADPH binding is essential for optimal interaction between Kvalpha and beta subunits and for Kvbeta-induced inactivation of Kv currents.