The vast array of neuronal action potential waveforms can be ascribed, in large part, to the sculpting of their falling phases by potassium channels. These membrane proteins play several other roles in cell physiology such as the regulation of heartbeat and of insulin release from pancreatic cells as well as auditory signal processing in the cochlea. The functional channel is a tetramer with either six or two transmembrane segments per monomer. Selectivity filters, voltage sensors and gating elements have been mapped to residues within the transmembrane region. Cytoplasmic residues, which are accessible targets for signal transduction cascades and provide attractive means of regulation of channel activity, are now seen to be capable of modulating various aspects of channel function. In this review, we focus on basic channel properties: activation, inactivation and ionic selectivity. We discuss these physiological parameters in the light of recent X-ray crystal structures of bacterial Kv channels, and a body of work combining mutagenesis with electrophysiology and spectroscopy.