Thyroid dysfunction affects 1–4% of the population worldwide, causing defects including neurodevelopmental disorders, dwarfism and cardiac arrhythmia. Here, we show that KCNQ1 and KCNE2 form a TSH-stimulated, constitutively-active, thyrocyte K+ channel required for normal thyroid hormone biosynthesis. Targeted disruption of Kcne2 impaired thyroid iodide accumulation up to 8-fold, impaired maternal milk ejection and halved milk T4 content, causing hypothyroidism, 50% reduced litter size, dwarfism, alopecia, goiter, and cardiac abnormalities including hypertrophy, fibrosis, and reduced fractional shortening. The alopecia, dwarfism and cardiac abnormalities were alleviated by T3/T4 administration to pups, by supplementing dams with T4 pre- and postpartum, or by pre-weaning surrogacy with Kcne2+/+ dams; conversely these symptoms were elicited in Kcne2+/+ pups by surrogacy with Kcne2−/− dams. The data identify a critical thyrocyte K+ channel, provide a possible novel therapeutic avenue for thyroid disorders, and predict an endocrine component to some previously-identified KCNE2- and KCNQ1-linked human cardiac arrhythmias.