Hyperpolarization-activated cation (HCN) channels give rise to an inward current with similar but not identical characteristics compared with the pacemaker current (I(f)), suggesting that HCN channel function is modulated by regulatory beta-subunits in native tissue. KCNE2 has been proposed to serve as a beta-subunit of HCN channels; however, available data remain contradictory. To further clarify this situation, we therefore analyzed the effect of KCNE2 on whole cell currents, single channel properties, and membrane protein expression of all cardiac HCN isoforms in the CHO cell system. On the whole cell level, current densities of all HCN isoforms were significantly increased by KCNE2 without altering voltage dependence or current reversal. While these results correlated well with the KCNE2-mediated 2.2-fold and 1.6-fold increases of membrane protein levels of HCN2 and HCN4, respectively, no effect of KCNE2 on HCN1 expression was obtained. All HCN subtypes displayed faster activation kinetics upon coexpression with KCNE2. Most importantly, for the first time, we demonstrated modulation of single channel function by KCNE2, thus supporting direct functional interaction with HCN subunits. In the presence of KCNE2, the single channel amplitudes and conductance of HCN1, HCN2, and HCN4 were significantly increased versus control recordings. Mean open time was significantly increased in cells coexpressing HCN2 + KCNE2, whereas it was unaffected in HCN1 + KCNE2 cotransfected cells and reduced in HCN4 + KCNE2 cotransfected cells compared with the respective HCN subunits alone. Thus, we demonstrate KCNE2-mediated distinct effects on HCN membrane expression and direct functional modulation of HCN isoforms, further supporting that KCNE2 surves as a regulatory beta-subunit of HCN channels.