Mutations in polycystins-1 and -2 (PC1 and PC2) cause autosomal dominant polycystic kidney disease (ADPKD), which is characterized by progressive development of epithelial renal cysts, ultimately leading to renal failure. The functions of these polycystins remain elusive. Here we show that PC2 is a Ca2+-permeable cation channel with properties distinct from any known intracellular channels. Its kinetic behavior is characterized by frequent transitions between closed and open states over a wide voltage range. The activity of the PC2 channel is transiently increased by elevating cytosolic Ca2+. Given the predominant endoplasmic reticulum (ER) location of PC2 and its unresponsiveness to the known modulators of mediating Ca2+ release from the ER, inositol-trisphosphate (IP3) and ryanodine, these results suggest that PC2 represents a novel type of channel with properties distinct from those of the other Ca2+-release channels. Our data also show that the PC2 channel can be translocated to the plasma membranes by defined chemical chaperones and proteasome modulators, suggesting that in vivo, it may also function in the plasma membrane under specific conditions. The sensitivity of the PC2 channel to changes of intracellular Ca2+ concentration is deficient in a mutant found in ADPKD patients. The dysfunction of such mutants may result in defective coupling of PC2 to intracellular Ca2+ homeostasis associated with the pathogenesis of ADPKD. © 2001 Academic Press.