The subthreshold, voltage-gated potassium channel of skeletal muscle is shown to contain MinK-related peptide 2 (MiRP2) and the pore-forming subunit Kv3.4. MiRP2-Kv3.4 channels differ from Kv3.4 channels in unitary conductance, voltage-dependent activation, recovery from inactivation, steady-state open probability, and block by a peptide toxin. Thus, MiRP2-Kv3.4 channels set resting membrane potential (RMP) and do not produce afterhyperpolarization or cumulative inactivation to limit action potential frequency. A missense mutation is identified in the gene for MiRP2 (KCNE3) in two families with periodic paralysis and found to segregate with the disease. Mutant MiRP2-Kv3.4 complexes exhibit reduced current density and diminished capacity to set RMP. Thus, MiRP2 operates with a classical potassium channel subunit to govern skeletal muscle function and pathophysiology.