M-type (KCNQ2/3) potassium channels are suppressed by activation of G(q/11)-coupled receptors, thereby increasing neuronal excitability. We show here that rat KCNQ2 can bind directly to the multivalent A-kinase-anchoring protein AKAP150. Peptides that block AKAP150 binding to the KCNQ2 channel complex antagonize the muscarinic inhibition of the currents. A mutant form of AKAP150, AKAP(DeltaA), which is unable to bind protein kinase C (PKC), also attenuates the agonist-induced current suppression. Analysis of recombinant KCNQ2 channels suggests that targeting of PKC through association with AKAP150 is important for the inhibition. Phosphorylation of KCNQ2 channels was increased by muscarinic stimulation; this was prevented either by coexpression with AKAP(DeltaA) or pretreatment with PKC inhibitors that compete with diacylglycerol. These inhibitors also reduced muscarinic inhibition of M-current. Our data indicate that AKAP150-bound PKC participates in receptor-induced inhibition of the M-current.