Cells need to distinguish between transient Ca2+ signals that induce events such as muscle contraction, secretion, adhesion and synaptic transmission, and sustained Ca2+ signals that are involved in cell proliferation and differentiation. The latter class of events is blocked in lymphocytes by the immunosuppressive drugs cyclosporin A and FK506, which inhibit calcineurin, a Ca2+-activated serine/threonine phosphatase necessary for the nuclear import of NF-AT transcription factors. Here we report that sustained high concentrations of Ca2+, but not transient pulses, are required to maintain NF-AT transcription factors in the nucleus, where they participate in Ca2+-dependent induction of genes required for lymphocyte activation and proliferation. Furthermore, overexpression and constitutive nuclear localization of NF-AT, but not Jun, Fos, NF-kappaB, Oct or Ets family members, renders the interleukin-2 enhancer in Jurkat T lymphocytes resistant to FK506 and cyclosporin A. Thus a primary effect of these immunosuppressive reagents is to control the subcellular localization of the NF-AT family of transcription factors.