Effects of sulfhydryl modification on the ATP regulated K+ channel (KATP channel) in the pancreatic beta-cell were studied, using the patch clamp technique. Application of the sulfhydryl oxidizing agents thimerosal and 2,2'-dithio-bis(5-nitropyridine) (DTBNP), in micromolar concentrations, caused complete inhibition of the KATP channel, in inside-out patches. The inhibition was rapid and was reversed by the disulfide reducing agents dithiothreitol and cysteine. Thimerosal, which is poorly membrane permeable, inhibited channel activity, only when applied to the intracellular face of the plasma membrane. In contrast, DTBNP, which is highly lipophilic, caused closure of the KATP channel and consequent depolarization of the membrane potential, also when applied extracellularly. Our results indicate the presence of accessible free SH groups on the cytoplasmic side of the KATP channel in the pancreatic beta-cell. These SH groups are essential for channel function and it is possible that thiol-dependent redox mechanisms can modulate KATP channel activity.