Voltage-gated K+ (Kv) channels control the excitability of arterial smooth muscle. However, the molecular mechanisms regulating Kv channel function in smooth muscle remain unclear. We examined the hypothesis that the vasoactive peptide angiotensin II (Ang II) regulates arterial smooth muscle Kv channel function via calcineurin-dependent activation of the transcription factor NFAT. We found that sustained administration of Ang II decreased Kv currents (IKv) by reducing the expression of Kv2.1 K+ channel subunits. This effect of Ang II was independent of pressure but required Ca2+ influx through L-type Ca2+ channels. Consistent with our hypothesis, we found that calcineurin and NFATc3 are obligatory components of the signaling cascade mediating reduced IKv by Ang II. We conclude that sustained Ang II exposure increases smooth muscle Ca2+, which leads to activation of calcineurin and NFATc3, culminating in decreased Kv2.1 expression and reduced IKv function. These results support the novel concept that NFATc3 controls the excitability of arterial smooth muscle by regulating Kv2.1 expression.