Wolfram syndrome is an autosomal recessive neuro-degenerative disorder associated with juvenile onset non-autoimmune diabetes mellitus and progressive optic atrophy. The disease has been attributed to mutations in the WFS1 gene, which codes for a protein predicted to possess 9-10 transmembrane segments. Little is known concerning the function of the WFS1 protein (wolframin). Endoglycosidase H digestion, immunocytochemistry, and subcellular fractionation studies all indicated that wolframin is localized to the endoplasmic reticulum in rat brain hippocampus and rat pancreatic islet beta-cells, and after ectopic expression in Xenopus oocytes. Reconstitution of wolframin from oocyte membranes into planar lipid bilayers demonstrated that the protein induced a large cation-selective ion channel that was blocked by Mg2+ or Ca2+. Inositol triphosphate was capable of activating channels in the fused bilayers that were similar to channel components induced by wolframin expression. Expression of wolframin also increased cytosolic calcium levels in oocytes. Wolframin thus appears to be important in the regulation of intracellular Ca2+ homeostasis. Disruption of this function may place cells at risk to suffer inappropriate death decisions, thus accounting for the progressive beta-cell loss and neuronal degeneration associated with the disease.