Analysis of ion channel mutants is a widely used approach for dissecting ion channel function and for characterizing the mechanisms of action of channel-directed modulators. Expression of functional potassium channels in potassium-uptake-deficient yeast together with genetic selection approaches offers an unbiased, high-throughput, activity-based readout that can rapidly identify large numbers of active ion channel mutants. Because of the assumption-free nature of the method, detailed biophysical analysis of the functional mutants from such selections can provide new and unexpected insights into both ion channel gating and ion channel modulator mechanisms. Here, we present detailed protocols for generation and identification of functional mutations in potassium channels using yeast selections in the potassium-uptake-deficient strain SGY1528. This approach is applicable for the analysis of structure-function relationships of potassium channels from a wide range of sources including viruses, bacteria, plants, and mammals and can be used as a facile way to probe the interactions between ion channels and small-molecule modulators.