All Kv7 potassium channels require membrane phosphatidylinositol-4,5-bisphosphate (PI(4,5)P2) for their normal function and hence can be physiologically regulated by neurotransmitters and hormones that stimulate phosphoinositide hydrolysis. Recent mutational analysis indicates that a cluster of basic residues in the proximal C-terminus (K354/K358/R360/K362) is crucial for PI(4,5)P2 activation of cardiac Kv7.1 channels. Since this cluster is largely conserved in all Kv7 subunits, we tested whether homologous residues are also required for activation of Kv7.2 (a subunit of neuronal M-channels). We found that the mutation Kv7.2 (R325A) (corresponding to R360 in Kv7.1) reduced Kv7.2 current amplitude by ∼60 % (P < 0.02) without change in voltage sensitivity and reduced the sensitivity of Kv7.2 channels to dioctanoyl-phosphatidylinositol-4,5-bisphosphate by ∼eightfold (P < 0.001). Taking into account previous experiments (Zhang et al., Neuron 37:963-75, 2003) implicating Kv7.2 (H328), and since R325 and H328 are conserved in homologous positions in all other Kv7 channels, we suggest that this proximal C-terminal domain adjacent to the last transmembrane domain that contains R325 and H328 (in Kv7.2) might play a major role in the activation of all members of the Kv7 channel family by PI(4,5)P2.