Proteolytic degradation of inducible nitric oxide synthase (iNOS or NOS2; EC 1.14.13.39) is one of the key steps by which the synthetic glucocorticoid dexamethasone controls the amount of iNOS protein and thus the production of nitric oxide (NO) in interferon-gamma-stimulated RAW 264.7 cells. In the present study we examined the role of the calmodulin (CaM)-binding site present within iNOS protein for the proteolytic degradation by the calcium-dependent neutral cysteine protease calpain I (EC 3.4.22.17). Using pulse chase experiments as well as cell-free degradation assays we show that the iNOS monomer is a direct substrate for cleavage by calpain I. Two structural determinants are involved in proteolytic cleavage, the canonical CaM-binding domain present at amino acids 501-532 and a conformational determinant located within iNOS. The access of the CaM-binding region appears to be critical for substrate cleavage as incubation of in vitro synthesized iNOS with purified CaM inhibits iNOS degradation by calpain I. Moreover, cytosolic CaM levels are decreased upon treatment of RAW 264.7 cells with dexamethasone as assessed by immunoprecipitation. The data shown herein provide novel insights into the underlying mechanisms involved in the anti-inflammatory actions of glucocorticoids.