The mechanism of ATP-sensitive potassium (K(ATP)) channel closure by ATP is unclear, and various kinetic models in which ATP binds to open or to closed states have previously been presented. Effects of phosphatidylinositol bisphosphate (PIP2) and multiple Kir6.2 mutations on ATP inhibition and open probability in the absence of ATP are explainable in kinetic models where ATP stabilizes a closed state and interaction with an open state is not required. Evidence that ATP can in fact interact with the open state of the channel is presented here. The mutant Kir6.2[L164C] is very sensitive to Cd2+ block, but very insensitive to ATP, with no significant inhibition in 1 mM ATP. However, 1 mM ATP fully protects the channel from Cd2+ block. Allosteric kinetic models in which the channel can be in either open or closed states with or without ATP bound are considered. Such models predict a pedestal in the ATP inhibition, i.e., a maximal amount of inhibition at saturating ATP concentrations. This pedestal is predicted to occur at >50 mM ATP in the L164C mutant, but at >1 mM in the double mutant L164C/R176A. As predicted, ATP inhibits Kir6.2[L164C/R176A] to a maximum of approximately 40%, with a clear plateau beyond 2 mM. These results indicate that ATP acts as an allosteric ligand, interacting with both open and closed states of the channel.