RNA editing at four sites in eag, a Drosophila voltage-gated potassium channel, results in the substitution of amino acids into the final protein product that are not encoded by the genome. These sites and the editing alterations introduced are K467R (Site 1, top of the S6 segment), Y548C, N567D and K699R (sites 2-4, within the cytoplasmic C-terminal domain). We mutated these residues individually and expressed the channels in Xenopus oocytes. A fully edited construct (all four sites) has the slowest activation kinetics and a paucity of inactivation, whereas the fully unedited channel exhibits the fastest activation and most dramatic inactivation. Editing Site 1 inhibits steady-state inactivation. Mutating Site 1 to the neutral residues resulted in intermediate inactivation phenotypes and a leftward shift of the peak current-voltage relationship. Activation kinetics display a Cole-Moore shift that is enhanced by RNA editing. Normalized open probability relationships for 467Q, 467R and 467K are superimposable, indicating little effect of the mutations on steady-state activation. 467Q and 467R enhance instantaneous inward rectification, indicating a role of this residue in ion permeation. Intracellular tetrabutylammonium blocks 467K significantly better than 467R. Block by intracellular, but not extracellular, tetraethylammonium interferes with inactivation. The fraction of inactivated current is reduced at higher extracellular Mg(+2) concentrations, and channels edited at Site 1 are more sensitive to changes in extracellular Mg(+2) than unedited channels. These results show that even a minor change in amino acid side-chain chemistry and size can have a dramatic impact on channel biophysics, and that RNA editing is important for fine-tuning the channel's function.