In this report, we present novel findings that implicate CCAAT/enhancer-binding protein (C/EBPalpha) in regulating the expression and activity of calpain 3 in vivo and data showing a new physiological substrate for calpain 3, cyclin A. Our results demonstrate that cleavage of cyclin A by calpain 3 occurs in mouse and human myeloid precursor cells. Calpain 3 cleaves cyclin A in vitro and in vivo, resulting in the production of a truncated product that lacks the N-terminal destruction box required for its degradation at the end of mitosis. The cleaved form of cyclin A retains the cyclin-dependent kinase (cdk) binding domain and forms active complexes with cdk2. Calpain 3-mediated cleavage of cyclin A is lacking in C/EBPalpha-/- mice, which are not able to produce mature granulocytes. Our data support a model in which calpain 3-mediated cleavage of cyclin A in dividing myeloid progenitor cells is important for the onset of differentiation. Deficits in this pathway in C/EBPalpha-/- mice might contribute to the failure of these mice to produce mature granulocytes. These data reveal a new pathway involving tightly controlled post-translational processing of cyclin A during differentiation of granulocytes.