The small proteins encoded by KCNE1 and KCNE2 have both been proposed as accessory subunits for the HERG channel. Here we report our investigation into the cell biology of the KCNE-HERG interaction. In a co-expression system, KCNE1 was more readily co-precipitated with co-expressed HERG than was KCNE2. When forward protein trafficking was prevented (either by Brefeldin A or engineering an ER-retention/retrieval signal onto KCNE cDNA) the intracellular abundance of KCNE2 and its association with HERG markedly increased relative to KCNE1. HERG co-localized more completely with KCNE1 than with KCNE2 in all the membrane-processing compartments of the cell (ER, Golgi and plasma membrane). By surface labeling and confocal immunofluorescence, KCNE2 appeared more abundant at the cell surface compared to KCNE1, which exhibited greater co-localization with the ER-marker calnexin. Examination of the extracellular culture media showed that a significant amount of KCNE2 was extracellular (both soluble and membrane-vesicle-associated). Taken together, these results suggest that during biogenesis of channels HERG is more likely to assemble with KCNE1 than KCNE2 due to distinctly different trafficking rates and retention in the cell rather than differences in relative affinity. The final channel subunit constitution, in vivo, is likely to be determined by a combination of relative cell-to-cell expression rates and differential protein processing and trafficking.