The hyperpolarization-activated cation current, I_h, plays an important role in regulating neuronal excitability, yet its native single-channel properties in the brain are largely unknown. Using variance-mean analysis to study single I_h channels in the apical dendrites of cortical layer 5 pyramidal neurons, we find that I_h channels have a uniform single-channel conductance of 680 ± 30 fS (n = 18), whereas channel number increases exponentially reaching densities as high as ~550 channels/mm ² at distal dendritic sites. These high channel densities generate significant membrane voltage noise. By incorporating a stochastic model of I_h single-channel gating into a morphologically realistic model of a layer 5 neuron, we show that this channel noise is higher in distal dendritic compartments, and increased 3-fold with a 10-fold increased single-channel conductance (6.8 pS) but constant I_h current density. In addition, we demonstrate that voltage fluctuations due to stochastic I_h channel gating impact on action potential output, with greater spike-timing precision in models with the experimentally determined single-channel conductance. These data suggest that in the face of high current densities the small single-channel conductance of I_h is critical for maintaining the fidelity of action potential output.