The flow of information from calcium-mobilizing receptors to nuclear factor of activated T cells (NFAT)–dependent genes is critically dependent on interaction between the phosphatase calcineurin and the transcription factor NFAT. A high-affinity calcineurin-binding peptide was selected from combinatorial peptide libraries based on the calcineurin docking motif of NFAT. This peptide potently inhibited NFAT activation and NFAT-dependent expression of endogenous cytokine genes in T cells, without affecting the expression of other cytokines that require calcineurin but not NFAT. Substitution of the optimized peptide sequence into the natural calcineurin docking site increased the calcineurin responsiveness of NFAT. Compounds that interfere selectively with the calcineurin-NFAT interaction without affecting calcineurin phosphatase activity may be useful as therapeutic agents that are less toxic than current drugs.