While the synaptic mechanisms involved in the generation of in vitro network oscillations have been widely studied, little is known about the importance of voltage-gated currents during such activity. Here we study the role of the M-current (I(M)) in the modulation of network oscillations in the gamma-frequency range (20-80 Hz). Kv7/KCNQ subunits, the molecular correlates of I(M), are abundantly expressed in CA1 and CA3 pyramidal neurons, and I(M) is an important modulator of pyramidal neuron firing. Using hippocampal slices, we recorded field activity and pyramidal neuron action potential timing during kainate-induced gamma oscillations. Application of the specific I(M) blocker XE991 causes a significant reduction of gamma oscillation amplitude with no significant change in oscillation frequency. Concomitant CA3 pyramidal neuron recordings show a significant increase in action potential frequency during ongoing gamma oscillations after the application of XE991. This increase is associated with a significant loss of periodicity of pyramidal neuron action potentials relative to the phase of the gamma oscillations. Using dynamic clamp, we show that I(M) acts to improve the periodicity of action potential timing and to decrease action potential frequency. We further validate these results in a compartmental model of a pyramidal neuron. Our work suggests that I(M) modulates gamma oscillations by regulating the phasing of action potential firing in pyramidal neurons.