AbstractPhosphatidylinositol-4,5-bisphosphate (PIP2) is a signaling lipid which regulates voltage-gated Kv7/KCNQ potassium channels. Altered PIP2 sensitivity of neuronal Kv7.2 channel is involved in KCNQ2 epileptic encephalopathy. However, the molecular action of PIP2 on Kv7.2 gating remains largely elusive. Here, we use molecular dynamics simulations and electrophysiology to characterize PIP2 binding sites in a human Kv7.2 channel. In the closed state, PIP2 localizes to the periphery of the voltage-sensing domain (VSD). In the open state, PIP2 binds to 4 distinct interfaces formed by the cytoplasmic ends of the VSD, the gate, intracellular helices A and B and their linkers. PIP2 binding induces bilayer-interacting conformation of helices A and B and the correlated motion of the VSD and the pore domain, whereas charge-neutralizing mutations block this coupling and reduce PIP2 sensitivity of Kv7.2 channels by disrupting PIP2 binding. These findings reveal the allosteric role of PIP2 in Kv7.2 channel activation.