A novel clathrin assembly protein (designated cardiac AP-3) has been isolated from dog heart which forms a K+ channel in planar lipid bilayers. AP-3 facilitated the in vitro formation of clathrin cages, which is diagnostic for clathrin assembly proteins. AP-3 consists mainly of 100-, 97-, and 55-kDa bands. A GTP-binding protein of approximately 25 kDa also co-purifies. The 100-kDa band was recognized by a monoclonal antibody to the gamma-adaptin of bovine brain clathrin assembly protein AP-1. A polyclonal antibody to the approximately 100-kDa doublet (alpha- and beta-adaptins) of bovine brain AP-2 did not cross-react with the purified protein. Western blot analysis of cardiac subcellular fractions showed that anti-AP-1 immunoreactivity was strongest in a sarcolemma-enriched fraction. Little immunoreactivity was detected in other cardiac subfractions, including sarcoplasmic reticulum, intercalated discs, and mitochondria. When reconstituted into planar lipid bilayers, AP-3 displays ion channel activity. Permeability ratios were PK/PCl approximately 16 and PK/PNa approximately 3, indicating a cation-selective channel somewhat selective for K+ versus Na+. The K+ channel displays several subconductance states (9 and 12 picosiemens in the main) and was blocked by CaCl2 (mM), inositol 1,3,4,5-tetrakisphosphate (20 microM), inositol 1,4,5-trisphosphate) (40 microM), and guanosine 5'-O-(3-thiotrisphosphate) (mM). Thus, the cardiac AP-3 appears to act as a K+ channel modulated by inositol polyphosphates and a small GTP-binding protein.