Mammalian GRP78/BiP is a stress-inducible 78-kDa endoplasmic reticulum (ER) protein with molecular chaperone and calcium-binding properties. The transactivation of grp78 by the calcium ionophore A23187 provides a model system with which to study the signal transduction that allows mammalian cells to sense calcium depletion in intracellular stores and activate transcription of specific genes. Linker-scanning mutation analysis of the grp78 promoter reveals that the single most important regulatory element is C1, which contains a CCAAT motif most proximal to the TATA sequence. The C1 element is crucial for mediating the stimulatory effects by the upstream regulatory elements under normal and stress conditions. In this report, we establish that the heteromeric CCAAT-binding factor CBF is the major component of the C1-binding factor (C1F) in human cells. A GGAGG motif flanking the CCAAT sequence also contributes to high-affinity C1F/CBF binding. We show here that the binding of C1F in vitro is sensitive to the concentration of calcium ions. At high calcium ion concentrations, the C1F-binding activity is lower because of a higher dissociation rate. This binding characteristic correlates with the induction of grp78 transcription in response to the depletion of intracellular calcium stores. The strikingly similar behavior of C1F from nuclear extracts of control and A23187-treated cells further suggests that C1F itself does not undergo any major inherent changes after calium depletion stress. Rather, its binding property could be modulated by the immediate calcium ionic environment in stressed and nonstressed cells. On the basis of the in vitro and in vivo site occupancies of C1F and other stress-inducible changes of upstream regulatory complexes, we present a model to explain how C1F and other upstream factors can synergistically activate grp78 transcription in calcium-depleted cells.