Functional KATP (ATP-sensitive potassium) channels are hetero-octamers of four Kir6 (inwardly rectifying potassium) channel subunits and four SUR (sulphonylurea receptor) subunits. Possible interactions between the C-terminal domain of SUR2A and Kir6.2 were investigated by co-immunoprecipitation of rat SUR2A C-terminal fragments with full-length Kir6.2 and by analysis of cloned KATP channel function and distribution in HEK-293 cells (human embryonic kidney 293 cells) in the presence of competing rSUR2A fragments. Three maltose-binding protein–SUR2A fusions, rSUR2A-CTA (rSUR2A residues 1254–1545), rSUR2A-CTB (residues 1254–1403) and rSUR2A-CTC (residues 1294–1403), were co-immunoprecipitated with full-length Kir6.2 using a polyclonal anti-Kir6.2 antiserum. A fourth C-terminal domain fragment, rSUR2A-CTD (residues 1358–1545) did not co-immunoprecipitate with Kir6.2 under the same conditions, indicating a direct interaction between Kir6.2 and a 65-amino-acid section of the cytoplasmic C-terminal region of rSUR2A between residues 1294 and 1358. ATP- and glibenclamide-sensitive K+ currents were decreased in HEK-293 cells expressing full-length Kir6 and SUR2 subunits that were transiently transfected with fragments rSUR2A-CTA, rSUR2A-CTC and rSUR2A-CTE (residues 1294–1359) compared with fragment rSUR2A-CTD or mock-transfected cells, suggesting either channel inhibition or a reduction in the number of functional KATP channels at the cell surface. Anti-KATP channel subunit-associated fluorescence in the cell membrane was substantially lower and intracellular fluorescence increased in rSUR2A-CTE expressing cells; thus, SUR2A fragments containing residues 1294–1358 reduce current by decreasing the number of channel subunits in the cell membrane. These results identify a site in the C-terminal domain of rSUR2A, between residues 1294 and 1358, whose direct interaction with full-length Kir6.2 is crucial for the assembly of functional KATP channels.