The discrete localization of ion channels is a critical determinant of neuronal excitability. We show here that the dendritic K+ channels Kv2.1 and Kv2.2 were differentially targeted in cultured hippocampal neurons. Kv2.1 was found in high-density clusters on the soma and proximal dendrites, while Kv2.2 was uniformly distributed throughout the soma and dendrites. Chimeras revealed a proximal restriction and clustering domain on the cytoplasmic tail of Kv2.1. Truncations and internal deletions revealed a 26-amino acid targeting signal within which four residues were critical for localization. This signal is not related to other known sequences for neuronal and epithelial membrane protein targeting and represents a novel cytoplasmic signal responsible for proximal restriction and clustering.