The HERG (KCNH2) potassium channel underlies the rapid component of the delayed rectifier current (I-kr), a current contributing to the repolarisation of the cardiac action potential. Mutations in HERG can cause the hereditary forms of the short-QT and long-QT syndromes, predisposing to ventricular arrhythmias and sudden cardiac death. HERG is expressed mainly in the cell membrane of cardiac myocytes, but has also been identified in cell membranes of a range of other cells, including smooth muscle and neurones. The mechanisms regulating the surface expression have however not yet been elucidated. Here we show, using stable HERG-expressing HEK 293 cells, that ceramide evokes a time-dependent decrease in HERG current which was not attributable to a change in gating properties of the channel. Surface expression of the HERG channel protein was reduced by ceramide as shown by biotinylation of surface proteins, western blotting and immunocytochemistry. The rapid decline in HERG protein after ceramide stimulation was due to protein ubiquitylation and its association with lysosomes. The results demonstrate that the surface expression of HERG is strictly regulated, and that ceramide modifies HERG currents and targets the protein for lysosomal degradation.