The transduction of taste is a fundamental process that allows animals to discriminate nutritious from noxious substances. Three taste modalities, bitter, sweet, and amino acid, are mediated by G protein-coupled receptors that signal through a common transduction cascade: activation of phospholipase C beta2, leading to a breakdown of phosphatidylinositol-4,5-bisphosphate (PIP2) into diacylglycerol and inositol 1,4,5-trisphosphate, which causes release of Ca2+ from intracellular stores. The ion channel, TRPM5, is an essential component of this cascade; however, the mechanism by which it is activated is not known. Here we show that heterologously expressed TRPM5 forms a cation channel that is directly activated by micromolar concentrations of intracellular Ca2+ (K1/2 = 21 microM). Sustained exposure to Ca2+ desensitizes TRPM5 channels, but PIP2 reverses desensitization, partially restoring channel activity. Whole-cell TRPM5 currents can be activated by intracellular Ca2+ and show strong outward rectification because of voltage-sensitive gating of the channels. TRPM5 channels are nonselective among monovalent cations and not detectably permeable to divalent cations. We propose that the regulation of TRPM5 by Ca2+ mediates sensory activation in the taste system.