Cyclic nucleotide-gated (CNG) channels in photoreceptors and olfactory neurons are activated by intracellular ligands (cAMP and cGMP) rather than voltage. Surprisingly, these channels share amino acid sequence homology with voltage-gated channels. Here we show that the distinct gating mechanisms exhibited by CNG and voltage-gated channels share features that reflect this structural homology. Thus, a 20 amino acid peptide ("ball peptide") derived from the Shaker-type K+ channel and responsible for its rapid inactivation also blocks CNG channels. Moreover, the peptide selectively blocks open CNG channels and prevents channel closure, showing that CNG channel activation, like activation of voltage-dependent K+ channels, involves the opening of a gate located on the intracellular side of the peptide-binding site. Amino acid substitutions in the peptide cause similar changes in blocking affinity of CNG and K+ channels, suggesting a conserved binding site. Using a chimeric retinal/olfactory channel, we show that the difference in the peptide affinity of the two CNG channels is due to a difference in the amino acid sequence of the conserved pore-forming region, demonstrating that this domain forms part of the peptide receptor.