The Kv2.1 gene encodes a highly conserved delayed rectifier potassium channel that is widely expressed in neurons of the central nervous system. In the bag cell neurons of Aplysia, Kv2.1 channels contribute to the repolarization of action potentials during a prolonged afterdischarge that triggers a series of reproductive behaviors. Partial inactivation of Aplysia Kv2.1 during repetitive firing produces frequency-dependent broadening of action potentials during the afterdischarge. We have now found that, as in mammalian neurons, Kv2.1 channels in bag cell neurons are localized to ring-like clusters in the plasma membrane of the soma and proximal dendrites. Either elevation of cyclic AMP levels or direct electrical stimulation of afterdischarge rapidly enhanced formation of these clusters on the somata of these neurons. In contrast, injection of a 13-amino acid peptide corresponding to a region in the C terminus that is required for clustering of Kv2.1 channels produced disassociation of the clusters, resulting in a more uniform distribution over the somata. Voltage clamp recordings demonstrated that peptide-induced dissociation of the Kv2.1 clusters is associated with an increase in the amplitude of delayed rectifier current and a shift of activation toward more negative potentials. In current clamp recording, injection of the unclustering peptide reduced the width of action potentials and reduced frequency-dependent broadening of action potentials. Our results suggest that rapid redistribution of Kv2.1 channels occurs during physiological changes in neuronal excitability.