A new class of K channel peptide toxin has been found in sea anemones. So far, four homologous ‘short’ toxins possessing 35–37 residues and 3 disulfide bonds have been isolated and sequenced. The two most thoroughly investigated members of this toxin group are ShK and BgK. The covalent structures of these toxins display no homology with the scorpion K toxins and their disulfide bonding pattern is also different. The NMR-derived solution structures of ShK and BgK toxins are similar in that two short alpha-helices are present, in contrast to the predominantly beta-sheet structures found in scorpion toxins. While BgK blocks Kv1.1,1.2 and 1.3 homomeric channels almost equipotently at 6–15 nM concentrations, ShK blocks Kv1.1 and 1.3 channels at very low (20–100 pM) concentrations and Kv1.2 at a much higher (>10 nM) concentration. The sea anemone peptides also interact with Kv1 heteromers present in rat brain membranes. Additionally, ShK has been shown to block intermediate conductance K(Ca) channels in lymphocytes and erythrocytes. Kv1.3 homomers are localized largely on the surfaces of T-lymphocytes; scorpion toxin blockade of these channels has been shown to inhibit proliferation of these cells in vitro and the development of delayed type hypersensitivity reaction and antibody formation in response to an allogeneic challenge in vivo. ShK toxin also inhibits in vitro lymphocyte proliferation in response to an antibody directed to a lymphocyte membrane antigen. The homomeric lymphocyte Kv1.3 and heteromeric brain Kv1 channel binding domains of ShK and BgK have been located by ‘alanine scans’ of analogs prepared by solid-phase peptide synthesis. Both toxins possess a receptor-binding ‘hot spot’ consisting of a sequentially contiguous Lys-Tyr diad on the second helical segment which spatially resembles a diad consisting of Lys27 and Tyr36 attached to a beta-sheet scaffold in charybdotoxin and related scorpion toxins. From analysis of the structural requirements for blocking Kv1.3 homomers and brain Kv1 heteromers, ShK analogs possessing even greater selectivity for the Kv1.3 channel have been designed. These peptides and smaller peptide-mimetic compounds incorporating the anemone toxin pharmacophore are being developed as potential immunosuppressant agents.