ATP-sensitive, inwardly rectifying K+ channels are present in apical membranes of the distal nephron and play a major role in K+ recycling and secretion. The cloned renal K+ channel, ROMK1, is a candidate for the renal epithelial K+ channel, since it shares many functional characteristics with the native channel. Additionally, ROMK1 contains a putative carboxy-terminal ATP-binding site. Although ROMK1 channel activity could be reactivated by cytosolic Mg-ATP after rundown, the role of nucleotides in channel gating was less certain. We now show that an alternatively spliced transcript of the ROMK channel gene, ROMK2, which encodes a K+ channel with a truncated amino terminus, expresses an ATP-regulated and ATP-sensitive K+ channel (IKATP). Differences in the amino terminus of ROMK isoforms alters the sensitivity of the channel-gating mechanism to ATP. To test whether ATP sensitivity of renal IKATP is mediated by direct interaction of nucleotide, point mutation of specific residues within the ROMK2 phosphate loop (P-loop) were investigated. These either enhanced or attenuated the sensitivity to both activation and inhibition by Mg-ATP, thus demonstrating a direct interaction of nucleotide with the channel-forming polypeptide.