Calcineurin is a widely distributed protein phosphatase regulated by calcium and calmodulin. It mediates the immunosuppressive actions of drugs such as cyclosporin and FK506, and has been implicated in a number of calcium-sensitive pathways in the nervous system, including regulation of neurotransmitter release and modulation of long-term changes in synaptic plasticity. Calcineurin associates physiologically with other proteins, including calmodulin, FKBP12 (FK506-binding protein), the ryanodine receptor, and the inositol 1,4,5-trisphosphate receptor. We now report the identification, molecular cloning, and functional characterization of a novel protein, cain (calcineurin inhibitor), that interacts with and inhibits calcineurin. The full-length cain cDNA predicts a 240-kDa protein with no significant homology to any known protein. Cain associates with calcineurin both in vitro and in vivo, leading to a non-competitive inhibition of calcineurin activity. The putative calcineurin-binding domain of cain, a 38-amino acid region defined by mutational analysis, is highly basic. Like calcineurin, cain has a prominent neuronal expression and a wide tissue distribution. Cain's expression pattern in the brain closely resembles that of calcineurin, indicating a physiologic association between the two proteins.