FKBP38 regulates apoptosis through unique interactions with multiple regulators including Bcl-2. Interestingly, the peptidylprolyl isomerase activity of FKBP38 is only detectable when it binds to calcium-saturated calmodulin (CaM/Ca2+). This, in turn, permits the formation of a complex with Bcl-2. FKBP38 thereby provides an important link between isomerase activity and apoptotic pathways. Here, we show that the N-terminal extension (residues 1-32) preceding the catalytic domain of FKBP38 has an autoinhibitory activity. The core isomerase activity of FKBP38 is inhibited by transient interactions involving the flexible N-terminal extension that precedes the catalytic domain. Notably, CaM/Ca2+ binds to this N-terminal extension and thereby releases the autoinhibitory contacts between the N-terminal extension and the catalytic domain, thus potentiating the isomerase activity of FKBP38. Our data demonstrate how CaM/Ca2+ modulates the catalytic activity of FKBP38.