The Kv1 family voltage-dependent K(+) channels assemble with cytosolic β subunits (Kvβ), which are composed of a flexible N terminus followed by a structured core domain. The N terminus of certain Kvβs inactivates the channel by blocking the ion conduction pore, and the core domain is a functional enzyme that uses NADPH as a cofactor. Oxidation of the Kvβ-bound NADPH inhibits inactivation and potentiates channel current, but the mechanism behind this effect is unknown. Here we show that after oxidation, the core domain binds to part of the N terminus, thus restraining it from blocking the channel. The interaction is partially mediated by two negatively charged residues on the core domain and three positively charged ones on the N terminus. These results provide a molecular basis for the coupling between the cellular redox state and channel activity, and establish Kvβ as a target for pharmacological control of Kv1 channels.