Voltage-gated potassium channels are membrane proteins that regulate the flow of K⁺ ions across the cell membrane. These channels respond to changes in electrostatic potential across the cell membrane, and allow passage of K⁺ ions through their conduction pore. In excitable cells, an interplay of voltage-gated K⁺, Na ⁺, and Ca²⁺ channels results in generation of electrical signals, known as action potential, that are propagated along the cell membrane. The crystal structure of Kv1.2, a voltage-gated potassium channel from rat brain, provided the first atomic-resolution structure of a voltage-gated potassium channel, in which the ion conduction gate is open. The studies presented in this dissertation use molecular dynamics simulations to investigate the ion permeation, as well as the gating mechanism of voltage-gated potassium channels. The atomic-resolution structures of Kv1.2 in the active and resting state conformations are refined in an explicit representation of the membrane environment. The gating charge of the Kv1.2 channel was calculated from all-atom molecular dynamics simulation. The residue-based decomposition of the gating charge revealed that the initial model of the closed state of Kv1.2 represents an intermediate conformation of the channel that precedes the resting state conformation. Electrostatic calculations revealed a highly-focused electric field within the protein, inside membrane. The calculations showed how a rather small movement of gating residues within this highly focused field is sufficient to provide enough energy to open and close the ion conduction pore. In addition, permeation of K⁺ ions through potassium channels was investigated. The simulations provided the first trajectories of ion conduction through the selectivity filter of potassium channels, confirming the notion of “knock-on” mechanism suggested more than 50 years ago by Hodgkin and Katz. The simulations revealed the sequence of multi-ion configurations involved in permeation and the jump of ions between previously identified binding sites.