Many forms of signal transduction occur when Ca(2+) enters the cytoplasm of a cell. It has been generally thought that there is a fast buffer that rapidly reduces the free Ca(2+) level and that it is this buffered level of Ca(2+) that triggers downstream biochemical processes, notably the activation of calmodulin (CaM) and the resulting activation of CaM-dependent enzymes. Given the importance of these transduction processes, it is crucial to understand exactly how Ca(2+) activates CaM. We have determined the rate at which Ca(2+) binds to CaM and found that Ca(2+) binds more rapidly to CaM than to other Ca(2+)-binding proteins. This property of CaM and its high concentration support a new view of signal transduction: CaM directly intercepts incoming Ca(2+) and sets the free Ca(2+) level (that is, it strongly contributes to fast Ca(2+) buffering) rather than responding to the lower Ca(2+) level set by other buffers. This property is crucial for making CaM an efficient transducer. Our results also suggest that other Ca(2+) binding proteins have a previously undescribed role in regulating the lifetime of Ca(2+) bound to CaM and thereby setting the gain of signal transduction.