Transcription factors belonging to the nuclear factor of activated T cells (NFAT) family regulate the expression of cytokine genes and other inducible genes during the immune response. The functions of NFAT proteins are directly controlled by the calcium- and calmodulin-dependent phosphatase calcineurin. Here we show that the binding of calcineurin to NFAT is substantially increased when calcineurin is activated with calmodulin and calcium. FK506.FKBP12 drug-immunophilin complexes inhibited the interaction of NFAT with activated calcineurin much more effectively than they inhibited the interaction with inactive calcineurin, suggesting that part of the interaction with activated calcineurin involved the enzyme active site. We have previously shown that NFAT is targeted to inactive calcineurin at a region distinct from the calcineurin active site (Aramburu, J., Garcia-Cozar, F. J., Raghavan, A., Okamura, H., Rao, A., and Hogan, P. G. (1998) Mol. Cell 1, 627-637); this region is also involved in NFAT binding to activated calcineurin, since binding is inhibited by an NFAT peptide spanning the calcineurin docking site on NFAT. The interacting surfaces are located on the catalytic domain of the calcineurin A chain and on an 86-amino acid fragment of the NFAT regulatory domain. NFAT binding to the calcineurin catalytic domain was inhibited by the calcineurin autoinhibitory domain and the RII substrate peptide, which bind in the calcineurin active site, as well as by the NFAT docking site peptide, which binds to a region of calcineurin distinct from the active site. We propose that, in resting cells, NFAT is targeted to a region of the calcineurin catalytic domain that does not overlap the calcineurin active site. Upon cell activation, displacement of the autoinhibitory domain by calmodulin binding allows NFAT to bind additionally to the calcineurin active site, thus positioning NFAT for immediate dephosphorylation at functional phosphoserine residues.