Several neurotransmitters, including acetylcholine, regulate neuronal tone by suppressing a non‐inactivating low‐threshold voltage‐gated potassium current generated by the M‐channel. Agonist dependent control of the M‐channel is mediated by calmodulin, activation of anchored protein kinase C (PKC), and depletion of the phospholipid messenger phosphatidylinositol 4,5‐bisphosphate (PIP2). In this report, we show how this trio of second messenger responsive events acts synergistically and in a stepwise manner to suppress activity of the M‐current. PKC phosphorylation of the KCNQ2 channel subunit induces dissociation of calmodulin from the M‐channel complex. The calmodulin‐deficient channel has a reduced affinity towards PIP2. This pathway enhances the effect of concomitant reduction of PIP2, which leads to disruption of the M‐channel function. These findings clarify how a common lipid cofactor, such as PIP2, can selectively regulate ion channels.