Hyperpolarization-activated cyclic nucleotide-gated channels (HCN1-4) play a crucial role in the regulation of cell excitability. Importantly, they contribute to spontaneous rhythmic activity in brain and heart. HCN channels are principally activated by membrane hyperpolarization and binding of cAMP. Here, we identify tyrosine phosphorylation by Src kinase as another mechanism affecting channel gating. Inhibition of Src by specific blockers slowed down activation kinetics of native and heterologously expressed HCN channels. The same effect on HCN channel activation was observed in cells cotransfected with a dominant-negative Src mutant. Immunoprecipitation demonstrated that Src binds to and phosphorylates native and heterologously expressed HCN2. Src interacts via its SH3 domain with a sequence of HCN2 encompassing part of the C-linker and the cyclic nucleotide binding domain. We identified a highly conserved tyrosine residue in the C-linker of HCN channels (Tyr476 in HCN2) that confers modulation by Src. Replacement of this tyrosine by phenylalanine in HCN2 or HCN4 abolished sensitivity to Src inhibitors. Mass spectrometry confirmed that Tyr476 is phosphorylated by Src. Our results have functional implications for HCN channel gating. Furthermore, they indicate that tyrosine phosphorylation contributes in vivo to the fine tuning of HCN channel activity.