Kv1 potassium channels are widely distributed in mammalian tissues and are involved in a variety of functions from controlling the firing rate of neurons to maturation of T-lymphocytes. Here we show that the newly described KCNE4 beta-subunit has a drastic inhibitory effect on currents generated by Kv1.1 and Kv1.3 potassium channels. The inhibition is found on channels expressed heterologously in both Xenopus oocytes and mammalian HEK293 cells. mKCNE4 does not inhibit Kv1.2, Kv1.4, Kv1.5, or Kv4.3 homomeric complexes, but it does significantly reduce current through Kv1.1/Kv1.2 and Kv1.2/Kv1.3 heteromeric complexes. Confocal microscopy and Western blotting reveal that Kv1.1 is present at the cell surface together with KCNE4. Real-time RT-PCR shows a relatively high presence of mKCNE4 mRNA in several organs, including uterus, kidney, lung, intestine, and in embryo, whereas a much lower mRNA level is detected in the heart and in five different parts of the brain. Having the broad distribution of Kv1 channels in mind, the demonstrated inhibitory property of KCNE4-subunits could locally and/or transiently have a dramatic influence on cellular excitability and on setting resting membrane potentials.