Andersen syndrome is an autosomal dominant disorder characterized by cardiac arrhythmias, periodic paralysis and dysmorphic features. Many Andersen syndrome cases have been associated with loss-of-function mutations in the inward rectifier K(+) channel Kir2.1 encoded by KCNJ2. Using engineered concatenated tetrameric channels we determined the mechanism for dominant loss-of-function associated with a trafficking-competent missense mutation, Kir2.1-T74A. This mutation alters a conserved threonine residue in an N-terminal domain analogous to the slide helix identified in the structure of a bacterial inward rectifier. Incorporation of a single mutant subunit in channel tetramers was sufficient to cause a selective impairment of whole-cell outward current, but no difference in the level of inward current compared with wild-type (WT) tetramers. The presence of two mutant subunits resulted in greatly reduced outward and impaired inward currents. Experiments using excised inside-out membrane patches revealed that tetramers with one mutant subunit exhibited increased Mg(2+) inhibition. Additional experiments demonstrated that concatenated tetramers containing one T74A subunit had reduced PIP(2) sensitivity, and that outward current carried by mutant tetramers could be restored by addition of PIP(2) in the absence of Mg(2+). Our results are consistent with the involvement of the Kir2.1 N-terminus in PIP(2) modulation of channel activity and support the existence of an inverse relationship between PIP(2) sensitivity and Mg(2+) inhibition of Kir2.1 channels. Our data also indicate that a single mutant subunit is sufficient to explain dominant-negative behavior of Kir2.1-T74A in Andersen syndrome.