Potassium channels allow K(+) ions to diffuse through their pores while preventing smaller Na(+) ions from permeating. Discrimination between these similar, abundant ions enables these proteins to control electrical and chemical activity in all organisms. Selection occurs at the narrow selectivity filter containing structurally identified K(+) binding sites. Selectivity is thought to arise because smaller ions such as Na(+) do not bind to these K(+) sites in a thermodynamically favorable way. Using the model K(+) channel KcsA, we examined how intracellular Na(+) and Li(+) interact with the pore and the permeant ions using electrophysiology, molecular dynamics simulations and X-ray crystallography. Our results suggest that these small cations have a separate binding site within the K(+) selectivity filter. We propose that selective permeation from the intracellular side primarily results from a large energy barrier blocking filter entry for Na(+) and Li(+) in the presence of K(+), not from a difference of binding affinity between ions.