Despite being highly toxic, carbon monoxide (CO) is also an essential intracellular signalling molecule. The mechanisms of CO-dependent cell signalling are poorly defined, but are likely to involve interactions with heme proteins. One such role for CO is in ion channel regulation. Here, we examine the interaction of CO with KATP channels. We find that CO activates KATP channels and that heme binding to a CXXHX16H motif on the SUR2A receptor is required for the CO-dependent increase in channel activity. Spectroscopic and kinetic data were used to quantify the interaction of CO with the ferrous heme-SUR2A complex. The results are significant because they directly connect CO-dependent regulation to a heme-binding event on the channel. We use this information to present molecular-level insight into the dynamic processes that control the interactions of CO with a heme-regulated channel protein, and we present a structural framework for understanding the complex interplay between heme and CO in ion channel regulation.