C-type inactivation is present in many voltage-gated potassium channels, and is probably related to "slow" inactivation in calcium and sodium channels. The mechanisms underlying C-type inactivation are unclear, but it is sensitive to mutations on both the extracellular and intracellular sides of the channel. We used an N-terminal deleted channel with a valine to alanine point mutation at the intracellular side of S6 (fKv1.4[V561A]N). This construct alters recovery from inactivation and inverts the relationship between C- type inactivation and [K+]o. We used this inverted relationship to examine C-type inactivation and coupling mechanisms between N- and C-type inactivation. The valine to alanine mutation reduces the channel's affinity for both quinidine and the N-terminal domain. However, binding of the N-terminal or quinidine restores normal recovery from inactivation. This suggests that coupling between N-and C-type inactivation is dominated by allosteric mechanisms. The permeation mechanism, driven by a reduction in permeant [K+]o following pore block (which would retard C-type inactivation), contributes minimally to coupling in these channels. We propose that the cytoplasmic half of S6 forms part of the N-terminal binding site, as previously predicted from X-ray crystallography studies in the distantly-related KcsA channel. Binding of the N- terminal domain or a positively charged lipophilic compound such as quinidine interacts with the hydrophobic moieties on S6 in the bound state. This binding can orient S6 into a conformation which resembles the normal C-type inactivated state. This is the likely mechanism by which drug or N-terminal binding increases the rate of C-type inactivation via an allosteric mechanism.