Inactivation of sodium channels terminates the sodium current responsible for initiation of action potentials in excitable cells. A hydrophobic sequence (isoleucine-phenylalanine-methionine, IFM), located in the inactivation gate segment connecting homologous domains III and IV of the sodium channel alpha subunit, is required for fast inactivation. A synthetic peptide containing the IFM sequence (acetyl-KIFMK-amide) restores fast inactivation to mutant sodium channels having a defective inactivation gate and to wild-type sodium channels having inactivation slowed by alpha-scorpion toxin. This peptide also competes with the intrinsic inactivation particle and binds to and blocks open sodium channels in a voltage- and frequency-dependent manner. A peptide (acetyl-KIQMK-amide) containing a mutation that prevents fast inactivation is not effective in restoring inactivation or in blocking open sodium channels. The results support the hypothesis that the sequence IFM serves as the inactivation particle of the sodium channel and suggest that it enters the intracellular mouth of the pore and occludes it during the process of inactivation.