Previous studies have shown that xenon reduces hyperpolarization-activated cyclic nucleotide-gated channels type-2 (HCN2) channel-mediated current (Ih) amplitude and shifts the half-maximal activation voltage (V1/2) in thalamocortical circuits of acute brain slices to more hyperpolarized potentials. HCN2 channels are dually gated by the membrane voltage and via cyclic nucleotides binding to the cyclic nucleotide-binding domain (CNBD) on the channel. In this study, we hypothesize that xenon interferes with the HCN2 CNBD to mediate its effect. Using the transgenic mice model HCN2EA, in which the binding of cAMP to HCN2 was abolished by two amino acid mutations (R591E, T592A), we performed ex-vivo patch-clamp recordings and in-vivo open-field test to prove this hypothesis. Our data showed that xenon (1.9 mM) application to brain slices shifts theV1/2of Ihto more hyperpolarized potentials in wild-type thalamocortical neurons (TC) (V1/2: −97.09 [−99.56–−95.04] mV compared to control −85.67 [−94.47–−82.10] mV;p= 0.0005). These effects were abolished in HCN2EA neurons (TC), whereby theV1/2reached only −92.56 [−93.16– −89.68] mV with xenon compared to −90.03 [−98.99–−84.59] mV in the control (p= 0.84). After application of a xenon mixture (70% xenon, 30% O2), wild-type mice activity in the open-field test decreased to 5 [2–10] while in HCN2EA mice it remained at 30 [15–42]%, (p= 0.0006). In conclusion, we show that xenon impairs HCN2 channel function by interfering with the HCN2 CNBD site and provide in-vivo evidence that this mechanism contributes to xenon-mediated hypnotic properties.