Inhibition of ATP-sensitive K(+) (K(ATP)) channels by ATP, a process presumably initiated by binding of ATP to the pore-forming subunit, Kir6.2, is reduced in the presence of phosphoinositides (PPIs). Previous studies led to the hypothesis that PPIs compromise ATP binding. Here, this hypothesis was tested using purified Kir6.2. We show that PPIs bind purified Kir6.2 in an isomer-specific manner, that biotinylated ATP analogs photoaffinity label purified Kir6.2, and that this labeling is weakened in the presence of PPIs. Patch-clamp measurements confirmed that these ATP analogs inhibited Kir6.2 channels, and that PPIs decreased the level of inhibition. These results indicate that interaction of PPIs with Kir6.2 impedes ATP-binding activity. The PPI regulation of ATP binding revealed in this study provides a putative molecular mechanism that is potentially pivotal to the nucleotide sensitivity of K(ATP) channels.