Voltage-gated sodium channels in brain neurons are complexes of a pore-forming alpha subunit with smaller beta 1 and beta 2 subunits. cDNA cloning and sequencing showed that the beta 2 subunit is a 186 residue glycoprotein with an extracellular NH2-terminal domain containing an immunoglobulin-like fold with similarity to the neural cell adhesion molecule (CAM) contactin, a single transmembrane segment, and a small intracellular domain. Coexpression of beta 2 with alpha subunits in Xenopus oocytes increases functional expression, modulates gating, and causes up to a 4-fold increase in the capacitance of the oocyte, which results from an increase in the surface area of the plasma membrane microvilli. beta 2 subunits are unique among the auxiliary subunits of ion channels in combining channel modulation with a CAM motif and the ability to expand the cell membrane surface area. They may be important regulators of sodium channel expression and localization in neurons.