Modulating cytoplasmic Ca concentration ([Ca]) by endoplasmic reticulum (ER)-localized inositol 1,4,5-trisphosphate receptor (InsPR) Ca-release channels is a universal signaling pathway that regulates numerous cell-physiological processes. Whereas much is known regarding regulation of InsPR activity by cytoplasmic ligands and processes, its regulation by ER-luminal Ca concentration ([Ca]) is poorly understood and controversial. We discovered that the InsPR is regulated by a peripheral membrane-associated ER-luminal protein that strongly inhibits the channel in the presence of high, physiological [Ca]. The widely-expressed Ca-binding protein annexin A1 (ANXA1) is present in the nuclear envelope lumen and, through interaction with a luminal region of the channel, can modify high-[Ca] inhibition of InsPR activity. Genetic knockdown of ANXA1 expression enhanced global and local elementary InsP-mediated Ca signaling events. Thus, [Ca] is a major regulator of InsPR channel activity and InsPR-mediated [Ca] signaling in cells by controlling an interaction of the channel with a peripheral membrane-associated Ca-binding protein, likely ANXA1.