Bestrophins form Ca2+ activated Cl- channels and regulate intercellular Ca2+ signaling1. We demonstrate that bestrophin 1 is localized in the endoplasmic reticulum (ER), where it physically interacts with stromal interacting molecule 1 (Stim1), the ER-Ca2+ sensor2,3. Intracellular Ca2+ transients in HEK293 cells elicited by stimulation of purinergic P2Y2-receptors were augmented but more transient after expression of hBest1, in contrast to dominant negative hBest1-R218C, which attenuated Ca2+ increase. The p21-activated protein kinase Pak2 was found to phosphorylate hBest1, thereby enhancing Ca2+ signaling and activation of Ca2+ dependent Cl- (TMEM16A)4 and K+ (SK4)5 channels. Lack of bestrophin 1 expression in respiratory epithelial cells of mBest1 knockout mice caused expansion of ER cisterns and induced Ca2+ deposits. We propose that hBest1 is important for Ca2+ handling of the ER store, probably by controlling the function of Stim1 and by acting as a counter-ion channel to balance transient membrane potentials occurring through inositol trisphosphate (IP3) induced Ca2+ release and refill of the ER-Ca2+ store. Thus bestrophin 1 controls activation of Ca2+ dependent ion channels by regulation of compartmentalized Ca2+ signaling