I(H) pacemaker channels carry a mixed monovalent cation current that, under physiological ion gradients, reverses at approximately -34 mV, reflecting a 4:1 selectivity for K over Na. However, I(H) channels display anomalous behavior with respect to permeant ions such that (a) open channels do not exhibit the outward rectification anticipated assuming independence; (b) gating and selectivity are sensitive to the identity and concentrations of externally presented permeant ions; (c) the channels' ability to carry an inward Na current requires the presence of external K even though K is a minor charge carrier at negative voltages. Here we show that open HCN channels (the hyperpolarization-activated, cyclic nucleotide sensitive pore forming subunits of I(H)) undergo a fast, voltage-dependent block by intracellular Mg in a manner that suggests the ion binds close to, or within, the selectivity filter. Eliminating internal divalent ion block reveals that (a) the K dependence of conduction is mediated via K occupancy of site(s) within the pore and that asymmetrical occupancy and/or coupling of these sites to flux further shapes ion flow, and (b) the kinetics of equilibration between K-vacant and K-occupied states of the pore (10-20 micros or faster) is close to the ion transit time when the pore is occupied by K alone ( approximately 0.5-3 micros), a finding that indicates that either ion:ion repulsion involving Na is adequate to support flux (albeit at a rate below our detection threshold) and/or the pore undergoes rapid, permeant ion-sensitive equilibration between nonconducting and conducting configurations. Biophysically, further exploration of the Mg site and of interactions of Na and K within the pore will tell us much about the architecture and operation of this unusual pore. Physiologically, these results suggest ways in which "slow" pacemaker channels may contribute dynamically to the shaping of fast processes such as Na-K or Ca action potentials.