Limited proteolysis of calcineurin in the presence of Ca(2+) suggested that its calmodulin-binding domain, readily degraded by proteases, was unfolded while calcineurin B was compactly folded [Hubbard, M. J., and Klee, C. B. (1989) Biochemistry 28, 1868-1874]. Moreover, in the crystal structure of calcineurin, with the four Ca(2+) sites of calcineurin B occupied, the calmodulin-binding domain is not visible in the electron density map [Kissinger, C. R., et al. (1995) Nature 378, 641-644]. Limited proteolysis of calcineurin in the presence of EGTA, shows that, when the low affinity sites of calcineurin B are not occupied, the calmodulin-binding domain is completely protected against proteolytic attack. Slow cleavages are, however, detected in the linker region between the calmodulin-binding and the autoinhibitory domains of calcineurin A. Upon prolonged exposure to the protease, selective cleavages in carboxyl-terminal end of the first helix and the central helix linker of calcineurin B and the calcineurin B-binding helix of calcineurin A are also detected. Thus, Ca(2+) binding to the low-affinity sites of calcineurin B affects the conformation of calcineurin B and induces a conformational change of the regulatory domain of calcineurin A, resulting in the exposure of the calmodulin-binding domain. This conformational change is needed for the partial activation of the enzyme in the absence of calmodulin and its full activation by calmodulin. A synthetic peptide corresponding to the calmodulin-binding domain is shown to interact with a peptide corresponding to the calcineurin B-binding domain, and this interaction is prevented by calcineurin B in the presence but not the absence of Ca(2+). These observations provide a mechanism to explain the dependence on Ca(2+) binding to calcineurin B for calmodulin activation and for the 10-20-fold increase in affinity of calcineurin for Ca(2+) upon removal of the regulatory domain by limited proteolysis [Stemmer, P. M., and Klee, C. B. (1994) Biochemistry 33, 6859-6866].