Hyperpolarization-activated cyclic nucleotide-gated (HCN) channels are activated by membrane hyperpolarization that creates time-dependent, inward-rectifying currents, gated by the movement of the intrinsic voltage sensor S4. However, inward rectification of the HCN currents is not only observed in the time-dependent HCN currents, but also in the instantaneous HCN tail currents. Inward rectification can also be seen in mutant HCN channels that have mainly time-independent currents (5). In the following paper, we show that intracellular Mg²⁺ functions as a voltage-dependent blocker of HCN channels, acting to reduce the outward currents. The affinity of HCN channels for Mg²⁺ is in the physiological range, with Mg²⁺ binding with an IC₅₀ of 0.53 mM in HCN2 channels and 0.82 mM in HCN1 channels at +50 mV. The effective electrical distance for the Mg²⁺ binding site was found to be 0.19 for HCN1 channels, suggesting that the binding site is in the pore. Removing a cysteine in the selectivity filter of HCN1 channels reduced the affinity for Mg²⁺ suggesting that this residue forms part of the binding site deep within the pore. Our results suggest that Mg²⁺ acts a voltage-dependent pore blocker and, therefore, reduces outwards currents through HCN channels. The pore blocking action of Mg²⁺ may play an important physiological role, especially for the slowly gating HCN2 and HCN4 channels. Mg²⁺ could potentially block outward hyperpolarizing HCN currents at the plateau of action potentials, thus preventing a premature termination of the action potential.