Bestrophins form Ca²⁺-activated Cl⁻ channels and regulate intracellular Ca²⁺ signaling. We demonstrate that bestrophin 1 is localized in the endoplasmic reticulum (ER), where it interacts with stromal interacting molecule 1, the ER-Ca²⁺ sensor. Intracellular Ca²⁺ transients elicited by stimulation of purinergic P2Y₂ receptors in HEK293 cells were augmented by hBest1. The p21-activated protein kinase Pak2 was found to phosphorylate hBest1, thereby enhancing Ca²⁺ signaling and activation of Ca²⁺-dependent Cl⁻ (TMEM16A) and K⁺ (SK4) channels. Lack of bestrophin 1 expression in respiratory epithelial cells of mBest1 knockout mice caused expansion of ER cisterns and induced Ca²⁺ deposits. hBest1 is, therefore, important for Ca²⁺ handling of the ER store and may resemble the long-suspected counterion channel to balance transient membrane potentials occurring through inositol triphosphate (IP₃)-induced Ca²⁺ release and store refill. Thus, bestrophin 1 regulates compartmentalized Ca²⁺ signaling that plays an essential role in Best macular dystrophy, inflammatory diseases such as cystic fibrosis, as well as proliferation.