Modulation of some Kv3 family potassium channels by protein kinase C (PKC) regulates their amplitude and kinetics and adjusts firing patterns of auditory neurons in response to stimulation. Nevertheless, little is known about the modulation of Kv3.3, a channel that is widely expressed throughout the nervous system and is the dominant Kv3 family member in auditory brainstem. We have cloned the cDNA for the Kv3.3 channel from mouse brain and have expressed it in a mammalian cell line and in Xenopus oocytes to characterize its biophysical properties and modulation by PKC. Kv3.3 currents activate at positive voltages and undergo inactivation with time constants of 150-250 ms. Activators of PKC increased current amplitude and removed inactivation of Kv3.3 currents, and a specific PKC pseudosubstrate inhibitor peptide prevented the effects of the activators. Elimination of the first 78 amino acids of the N terminus of Kv3.3 produced noninactivating currents suggesting that PKC modulates N-type inactivation, potentially by phosphorylation of sites in this region. To identify potential phosphorylation sites, we investigated the response of channels in which serines in this N-terminal domain were subjected to mutagenesis. Our results suggest that serines at positions 3 and 9 are potential PKC phosphorylation sites. Computer simulations of model neurons suggest that phosphorylation of Kv3.3 by PKC may allow neurons to maintain action potential height during stimulation at high frequencies, and may therefore contribute to stimulus-induced changes in the intrinsic excitability of neurons such as those of the auditory brainstem.