The molecular basis of general anesthetic action on membrane proteins that control ion transport is not yet understood. In a previous report (Covarrubias, M., and Rubin, E. (1993) Proc. Natl. Acad. Sci. 90, 6957-6960), we found that low concentrations of ethanol (17-170mM) selectively inhibited a noninactivating cloned K+ channel encoded by Drosophila Shaw2. Here, we have conducted equilibrium dos-inhibition experiments, single channel recording, and mutagenesis in vitro to study the mechanism underlying the inhibition of Shaw2K+ channels by a homologous series of n-alkanols (ethanol to 1-hexanol). The results showed that: (i) these alcohols inhibited Shaw2 whole-cell currents, the equilibrium dose-inhibition relations were hyperbolic, and competition experiments revealed the presence of a discrete site of action, possibly a hydrophobic pocket; (ii) this pocket may be part of the protein because n-alkanol sensitivity can be transferred to novel hybrid K+ channels composed of Shaw2 subunits and homologous ethanol-insensitive subunits: (iii) moreover, a hydrophobic point mutation within a cytoplasmic loop of an ethanol-insensitive K+ channel (human Kv3.4) was sufficient to allow significant inhibition by n-alkanols, with a dose-inhibition relation that closely resembled that of wildtype Shaw2 channels; and (iv) 1-butanol selectively inhibited long duration single channel openings in a manner consistent with a direct effect on channel gating. These results strongly suggest that a discrete site within the ion channel protein is the primary locus of alcohol and general anesthetic action.