Fibrocystin, a type I membrane protein of unknown function, is the protein affected in the autosomal recessive form of polycystic kidney disease. Here we show that fibrocystin undergoes regulated proteolysis. Several proteolytic cleavages occur within the predicted ectodomain, whereas at least one cleavage occurs within the cytoplasmic portion. The latter generates a C-terminal intracellular fragment that harbors the nuclear localization signal KRKVSRLAVTGERTATPAPKIPRIT and translocates to the nucleus. Proteolytic cleavage of fibrocystin occurs constitutively in long term cultures of polarized inner medullary collecting duct cells (mIMCD-3). Activation of protein kinase C and release of intracellular Ca2+ are required for proteolysis under these conditions. In short term cultures of human embryonic kidney 293 cells (HEK-293), proteolytic cleavage of fibrocystin can be elicited by stimulation of intracellular Ca2+ release or activation of protein kinase C. These results identify a novel Ca2+-dependent pathway that signals from fibrocystin located in the cell membrane to the nucleus.