Activation of intracellular Ca2+ channels by inositol 1,4,5-trisphosphate (Ins(1,4,5)P3) represents the initial Ca2+ mobilization step in response to many extracellular signals. Here we report that Ins(1,4,5)P3-induced channel activation in permeabilized hepatocytes is followed by a time-dependent inactivation, which is a direct consequence of ligand binding. The inactivation by Ins(1,4,5)P3 parallels the quantal character of channel opening, giving rise to a unique process of incremental inactivation whereby discrete channel populations are inhibited at each Ins(1,4,5)P3 dose. Ins(1,4,5)P3 can induce inactivation in the absence of stored Ca2+, but the inactivation rate is enhanced by increases of cytosolic Ca2+. The inhibitory effect of Ins(1,4,5)P3 can be reversed by Ins(1,4,5)P3 washout, or by chelation of cytosolic Ca2+. Thus, Ins(1,4,5)P3 and Ca2+ act as coinhibitors of the Ins(1,4,5)P3-sensitive Ca2+ channel. Inactivation is an inherent consequence of Ins(1,4,5)P3-induced channel opening which can terminate increases of cytosolic Ca2+.