The HCN4 gene encodes a hyperpolarization-activated cation current contributing to the slow components of the pacemaking currents I(f) in the sinoatrial node and I(h) or I(q) in the thalamus. Heterologous expression studies of individual HCN channels have, however, failed to reproduce fully the diversity of native I(f/h/q) currents, suggesting the presence of modulating auxiliary subunits. Consistent with this is the recent description of KCNE2, which is highly expressed in the sinoatrial node, as a beta-subunit of rapidly activating HCN1 and HCN2 channels. To determine whether KCNE2 can also modulate the slow component of native I(f/h/q) currents, we co-expressed KCNE2 with HCN4 in Xenopus oocytes and in Chinese hamster ovary (CHO) cells and analysed the resulting currents using two-electrode voltage-clamp and patch-clamp techniques, respectively. In both cell types, co-expressed KCNE2 enhanced HCN4-generated current amplitudes, slowed the activation kinetics and shifted the voltage for half-maximal activation of currents to more negative voltages. In contrast, the related family members KCNE1, KCNE3 and KCNE4 did not change current characteristics of HCN4. Consistent with these electrophysiological results, the carboxy-terminal tail of KCNE2, but not of other KCNE subunits, interacted with the carboxy-terminal tail of HCN4 in yeast two-hybrid assays. KCNE2, by modulating I(f) or I(h) currents, might thus contribute to the electrophysiological diversity of known pacemaking currents in the heart and brain.