Non-receptor-tyrosine kinases (protein-tyrosine kinases) and non-receptor tyrosine phosphatases (PTPs) have been implicated in the regulation of ion channels, neuronal excitability, and synaptic plasticity. We previously showed that protein-tyrosine kinases such as Src kinase and PTPs such as PTPα and PTPε modulate the activity of delayed-rectifier K(+) channels (I(K)). Here we show cultured cortical neurons from PTPε knock-out (EKO) mice to exhibit increased excitability when compared with wild type (WT) mice, with larger spike discharge frequency, enhanced fast after-hyperpolarization, increased after-depolarization, and reduced spike width. A decrease in I(K) and a rise in large-conductance Ca(2+)-activated K(+) currents (mBK) were observed in EKO cortical neurons compared with WT. Parallel studies in transfected CHO cells indicate that Kv1.1, Kv1.2, Kv7.2/7.3, and mBK are plausible molecular correlates of this multifaceted modulation of K(+) channels by PTPε. In CHO cells, Kv1.1, Kv1.2, and Kv7.2/7.3 K(+) currents were up-regulated by PTPε, whereas mBK channel activity was reduced. The levels of tyrosine phosphorylation of Kv1.1, Kv1.2, Kv7.3, and mBK potassium channels were increased in the brain cortices of neonatal and adult EKO mice compared with WT, suggesting that PTPε in the brain modulates these channel proteins. Our data indicate that in EKO mice, the lack of PTPε-mediated dephosphorylation of Kv1.1, Kv1.2, and Kv7.3 leads to decreased I(K) density and enhanced after-depolarization. In addition, the deficient PTPε-mediated dephosphorylation of mBK channels likely contributes to enhanced mBK and fast after-hyperpolarization, spike shortening, and consequent increase in neuronal excitability observed in cortical neurons from EKO mice.