Suppression of M current channels by muscarinic receptors enhances neuronal excitability. Little is known about the molecular mechanism of this inhibition except the requirement for a specific G protein and the involvement of an unidentified diffusible second messenger. We demonstrate here that intracellular ATP is required for recovery of KCNQ2/KCNQ3 current from muscarinic suppression, with an EC₅₀ of ∼0.5 mM. Substitution of nonhydrolyzable ATP analogs for ATP slowed or prevented recovery. ADPβS but not ADP also prevented the recovery. Receptor-mediated inhibition was irreversible when recycling of agonist-sensitive pools of phosphatidylinositol-4,5-bisphosphate (PIP₂) was blocked by lipid kinase inhibitors. Lipid phosphorylation by PI 4-kinase is required for recovery from muscarinic modulation of M current.