The Kv4.2 transient voltage-dependent potassium current contributes to the morphology of the cardiac action potential as well as to neuronal excitability and firing frequency. Here we report profound effects of the Kv4.2 C terminus on the surface expression and activation gating properties of Kv4.2 that are modulated by the direct interaction between KChIP2, an auxiliary regulatory subunit, and the C terminus of Kv4.2. We show that increasingly large truncations of the C terminus of rat Kv4.2 (wild type) cause a progressive decrease of Kv4.2 current along with a shift in voltage-dependent activation that is closely correlated with negative charge deletion. Co-expression of more limited Kv4.2 C-terminal truncation mutants (T588 and T528) with KChIP2 results in a doubling of Kv4.2 protein expression and up to an 8-fold increase in Kv4.2 current amplitude. Pulsechase experiments show that co-expression with KChIP2 slows Kv4.2 wild type degradation 8-fold. Co-expression of KChIP2 with an intermediate-length C-terminal truncation mutant (T474) shifts Kv4.2 activation voltage dependence and enhances expression of Kv4.2 current. The largest truncation mutants (T417 and DeltaC) show an intracellular localization with no measurable currents and no response to KChIP2 co-expression. Co-immunoprecipitation and competitive glutathione S-transferase-binding assays indicate a direct interaction between KChIP2 and the Kv4.2 C terminus with a relative binding affinity comparable with that of the N terminus. Overall, these results suggest that the C-terminal domain of Kv4.2 plays a critical role in voltage-dependent activation and functional expression that is mediated by direct interaction between the Kv4.2 C terminus and KChIP2.