Excystation of Giardia lamblia, which initiates infection, is a poorly understood but dramatic differentiation induced by physiological signals from the host. Our data implicate a central role for calcium homeostasis in excystation. Agents that alter cytosolic Ca(2+) levels (1,2-bis(2-aminophenoxy)ethane-N,N,N',N'-tetraacetic acid-tetra(acetyloxymethyl) ester, a Ca(2+) channel blocker, Ca(2+) ionophores, and thapsigargin) strongly inhibit excystation. Treatment of Giardia with thapsigargin raised intracellular Ca(2+) levels, and peak Ca(2+) responses increased with each stage of excystation, consistent with the kinetics of inhibition. Fluorescent thapsigargin localized to a likely Ca(2+) storage compartment in cysts. The ability to sequester ions in membrane-bounded compartments is a hallmark of the eukaryotic cell. These studies support the existence of a giardial thapsigargin-sensitive Ca(2+) storage compartment resembling the sarcoplasmic/endoplasmic reticulum calcium ATPase pump-leak system and suggest that it is important in regulation of differentiation and appeared early in the evolution of eukaryotic cells. Calmodulin antagonists also blocked excystation. The divergent giardial calmodulin localized to the eight flagellar basal bodies/centrosomes, like protein kinase A. Inhibitor kinetics suggest that protein kinase A signaling triggers excystation, whereas calcium signaling is mainly required later, for parasite activation and emergence. Thus, the basal bodies may be a cellular control center to coordinate the resumption of motility and cytokinesis in excystation.