Ryanodine and inositol 1,4,5-trisphosphate (IP(3)) receptors - two related families of Ca(2+) channels responsible for release of Ca(2+) from intracellular stores  - are biphasically regulated by cytosolic Ca(2+)   . It is thought that the resulting positive feedback allows localised Ca(2+)-release events to propagate regeneratively, and that the negative feedback limits the amplitude of individual events  . Stimulation of IP(3) receptors by Ca(2+) occurs through a Ca(2+)-binding site that becomes exposed only after IP(3) has bound to its receptor  . Here, we report that rapid inhibition of IP(3) receptors by Ca(2+) occurs only if the receptor has not bound IP(3). The IP(3) therefore switches its receptor from a state in which only an inhibitory Ca(2+)-binding site is accessible to one in which only a stimulatory site is available. This regulation ensures that Ca(2+) released by an active IP(3) receptor may rapidly inhibit its unliganded neighbours, but it cannot terminate the activity of a receptor with IP(3) bound. Such lateral inhibition, which is a universal feature of sensory systems where it improves contrast and dynamic range, may fulfil similar roles in intracellular Ca(2+) signalling by providing increased sensitivity to IP(3) and allowing rapid graded recruitment of IP(3) receptors.