Ca(2+) entry through store-operated Ca(2+) release-activated Ca(2+) (CRAC) channels initiates key functions such as gene expression and exocytosis of inflammatory mediators. Activation of CRAC channels by store depletion involves the redistribution of the ER Ca(2+) sensor, stromal interaction molecule 1 (STIM1), to peripheral sites where it co-clusters with the CRAC channel subunit, Orai1. However, how STIM1 communicates with the CRAC channel and initiates the subsequent events culminating in channel opening is unclear. Here, we show that redistribution of STIM1 and Orai1 occurs in parallel with a pronounced increase in fluorescence resonance energy transfer (FRET) between STIM1 and Orai1, supporting the idea that activation of CRAC channels occurs through physical interactions with STIM1. Co-expression of Orai1-CFP and Orai1-YFP results in a high degree of FRET in resting cells, indicating that Orai1 exists as a multimer. However, store depletion triggers molecular rearrangements in Orai1 resulting in a decline in Orai1-Orai1 FRET. The decline in Orai1-Orai1 FRET is not seen in the absence of STIM1 co-expression and is abolished in Orai1 mutants with impaired STIM1 interaction. Both the STIM1-Orai1 interaction as well as the molecular rearrangements in Orai1 are altered by two powerful modulators of CRAC channel activity: extracellular Ca(2+) and 2-APB. These studies identify a STIM1-dependent conformational change in Orai1 during the activation of CRAC channels and reveal that STIM1-Orai1 interaction and the downstream Orai1 conformational change can be independently modulated to fine-tune CRAC channel activity.