We investigated the role of caffeine-sensitive intracellular stores in regulating intracellular calcium ([Ca(2+)](i)) and glutamatergic synaptic transmission from rod photoreceptors. Caffeine transiently elevated and then markedly depressed [Ca(2+)](i) to below prestimulus levels in rod inner segments and synaptic terminals. Concomitant with the depression was a reduction of glutamate release and a hyperpolarization of horizontal cells, neurons postsynaptic to rods. Caffeine did not affect the rods' membrane potentials indicating that caffeine likely acted via some mechanism(s) other than a voltage-dependent deactivation of the calcium channels. Most of caffeine's depressive action on [Ca(2+)](i), on glutamate release, and on I(Ca) in rods can be attributed to calcium release from stores: (1) caffeine's actions on [Ca(2+)](i) and I(Ca) were reduced by intracellular BAPTA and barium substitution for calcium, (2) other nonxanthine store-releasing compounds, such as thymol and chlorocresol, also depressed [Ca(2+)](i), and (3) the magnitude of [Ca(2+)](i) depression depended on basal [Ca(2+)](i) before caffeine. We propose that caffeine-released calcium reduces I(Ca) in rods by an as yet unidentified intracellular signaling mechanism. To account for the depression of [Ca(2+)](i) below rest levels and the increased fall rate of [Ca(2+)](i) with higher basal calcium, we also propose that caffeine-evoked calcium release from stores activates a calcium transporter that, via sequestration into stores or extrusion, lowers [Ca(2+)](i) and suppresses glutamate release. The effects of store-released calcium reported here operate at physiological calcium concentrations, supporting a role in regulating synaptic signaling in vivo.