An additional component of the regulatory system of rat skeletal muscle calpain has been identified. It exerts a potent activating effect on calpain activity and is a heat stable small molecular weight protein. Of the two calpain isozymes present in muscle, the activator is specific for calpain II, being uneffective with calpain I. It promotes activation of the proteinase by reducing 50 fold, from 1 mM to of 20 microM, the requirement of Ca2+ for maximum catalytic activity of the proteinase. However in the presence of the activator calpain II expresses a consistent fraction of the maximum activity even at significantly lower concentrations of Ca2+ (below 5 microM Ca2+). The activator effect follows kinetics that are consistent with the presence of specific binding sites on the calpain molecules. The activator not only removes in a dose dependent fashion the inhibition of calpain by calpastatin, but also prevents inhibition of the proteinase upon the addition of calpastatin. Competition experiments revealed that the proteinase contains distinct sites for the activator and the inhibitor, and that both ligands can bind to calpain with the formation of an almost fully active ternary complex.