The Ca2+ release-activated Ca2+ (CRAC) channel is the most well documented of the store-operated ion channels that are widely expressed and are involved in many important biological processes. However, the regulation of the CRAC channel by intracellular or extracellular messengers as well as its molecular identity is largely unknown. Specifically, in the absence of extracellular divalent cations it becomes permeable to monovalent cations with a larger conductance, however this monovalent cation current inactivates rapidly by an unknown mechanism. Here we found that Ca2+ dissociation from a site on the extracellular side of the CRAC channel is responsible for the inactivation of its Na+ current, and Ca 2+ occupancy of this site otherwise potentiates its Ca2+ as well as Na+ currents. This Ca2+-dependent potentiation is required for the normal functioning of CRAC channels.