HCN channels play a unique role in bilaterian physiology as the only hyperpolarization-gated cation channels. Their voltage-gating is regulated by cyclic nucleotides and phosphatidylinositol 4,5-bisphosphate (PIP2). Activation of HCN channels provides the depolarizing current in response to hyperpolarization that is critical for intrinsic rhythmicity in neurons and the sinoatrial node. Additionally, HCN channels regulate dendritic excitability in a wide variety of neurons. Little is known about the early functional evolution of HCN channels, but the presence of HCN sequences in basal metazoan phyla and choanoflagellates, a protozoan sister group to the metazoans, indicate that the gene family predates metazoan emergence. We functionally characterized two HCN channel orthologs from Nematostella vectensis (Cnidaria, Anthozoa) to determine which properties of HCN channels were established prior to the emergence of bilaterians. We find Nematostella HCN channels share all the major functional features of bilaterian HCNs, including reversed voltage-dependence, activation by cAMP and PIP2, and block by extracellular Cs+. Thus bilaterian-like HCN channels were already present in the common parahoxozoan ancestor of bilaterians and cnidarians, at a time when the functional diversity of voltage-gated K+ channels was rapidly expanding. NvHCN1 and NvHCN2 are expressed broadly in planulae and in both the endoderm and ectoderm of juvenile polyps.