Phosphatidylinositol bisphosphate (PIP2) directly regulates functions as diverse as the organization of the cytoskeleton, vesicular transport and ion channel activity. It is not known, however, whether dynamic changes in PIP2 levels have a regulatory role of physiological importance in such functions. Here, we show in both native cardiac cells and heterologous expression systems that receptor-regulated PIP2 hydrolysis results in desensitization of a GTP-binding protein-stimulated potassium current. Two receptor-regulated pathways in the plasma membrane cross-talk at the level of these channels to modulate potassium currents. One pathway signals through the betagamma subunits of G proteins, which bind directly to the channel. Gbetagamma subunits stabilize interactions with PIP2 and lead to persistent channel activation. The second pathway activates phospholipase C (PLC) which hydrolyses PIP2 and limits Gbetagamma-stimulated activity. Our results provide evidence that PIP2 itself is a receptor-regulated second messenger, downregulation of which accounts for a new form of desensitization.