ERK5 is unique among mitogen-activated protein kinases (MAPKs) in that it contains a large C-terminal tail. We addressed the question of how this tail could affect the signaling capacity of ERK5. Gradual deletion of the C-terminal domains resulted in a drastic increase of ERK5 kinase activity, which was dependent on the up-stream MAPK cascade, thus indicating a possible auto-inhibitory function of the tail. It is interesting that ERK5 was able to autophosphorylate its own tail. Moreover, ERK5, which was found to be expressed in virtually all kinds of cell lines, localized to nuclear as well as cytoplasmic compartments. The localization of ERK5 was determined by its C-terminal domains, which were also required for appropriate nucleocytoplasmic shuttling. Taken together, these results indicate that ERK5 signaling is directed by the presence of its unique C-terminal tail, which might be the key to understanding the key role of ERK5 in MAPK signaling.