The time course of inactivation of voltage-activated potassium (Kv) channels is an important determinant of the firing rate of neurons. In many Kv channels highly unsaturated lipids as arachidonic acid, docosahexaenoic acid and anandamide can induce fast inactivation. We found that these lipids interact with hydrophobic residues lining the inner cavity of the pore. We analysed the effects of these lipids on Kv1.1 current kinetics and their competition with intracellular tetraethylammonium and Kvbeta subunits. Our data suggest that inactivation most likely represents occlusion of the permeation pathway, similar to drugs that produce 'open-channel block'. Open-channel block by drugs and lipids was strongly reduced in Kv1.1 channels whose amino acid sequence was altered by RNA editing in the pore cavity, and in Kv1.x heteromeric channels containing edited Kv1.1 subunits. We show that differential editing of Kv1.1 channels in different regions of the brain can profoundly alter the pharmacology of Kv1.x channels. Our findings provide a mechanistic understanding of lipid-induced inactivation and establish RNA editing as a mechanism to induce drug and lipid resistance in Kv channels.