The synaptic vesicle protein synaptotagmin I has been proposed to serve as a Ca(2+) sensor for rapid exocytosis. Synaptotagmin spans the vesicle membrane once and possesses a large cytoplasmic domain that contains two C2 domains, C2A and C2B. Multiple Ca(2+) ions bind to the membrane proximal C2A domain. However, it is not known whether the C2B domain also functions as a Ca(2+)-sensing module. Here, we report that Ca(2+) drives conformational changes in the C2B domain of synaptotagmin and triggers the homo- and hetero-oligomerization of multiple isoforms of the protein. These effects of Ca(2)+ are mediated by a set of conserved acidic Ca(2)+ ligands within C2B; neutralization of these residues results in constitutive clustering activity. We addressed the function of oligomerization using a dominant negative approach. Two distinct reagents that block synaptotagmin clustering potently inhibited secretion from semi-intact PC12 cells. Together, these data indicate that the Ca(2)+-driven clustering of the C2B domain of synaptotagmin is an essential step in excitation-secretion coupling. We propose that clustering may regulate the opening or dilation of the exocytotic fusion pore.