Polycystin-2 (PC2), the gene product of one of two genes mutated in dominant polycystic kidney disease, is a member of the transient receptor potential cation channel family and can function as intracellular calcium (Ca²⁺) release channel. We performed a yeast two-hybrid screen by using the NH₂ terminus of PC2 and identified syntaxin-5 (Stx5) as a putative interacting partner. Coimmunoprecipitation studies in cell lines and kidney tissues confirmed interaction of PC2 with Stx5 in vivo. In vitro binding assays showed that the interaction between Stx5 and PC2 is direct and defined the respective interaction domains as the t-SNARE region of Stx5 and amino acids 5 to 72 of PC2. Single channel studies showed that interaction with Stx5 specifically reduces PC2 channel activity. Epithelial cells overexpressing mutant PC2 that does not bind Stx5 had increased baseline cytosolic Ca²⁺ levels, decreased endoplasmic reticulum (ER) Ca²⁺ stores, and reduced Ca²⁺ release from ER stores in response to vasopressin stimulation. Cells lacking PC2 altogether had reduced cytosolic Ca²⁺ levels. Our data suggest that PC2 in the ER plays a role in cellular Ca²⁺ homeostasis and that Stx5 functions to inactivate PC2 and prevent leaking of Ca²⁺ from ER stores. Modulation of the PC2/Stx5 interaction may be a useful target for impacting dysregulated intracellular Ca²⁺ signaling associated with polycystic kidney disease.