In dividing cells calpastatin diffuses from aggregates into cytosol, indicating the requirement for a tight regulation of calpain. Accordingly, the involvement of the calpain-calpastatin system in cell proliferation and in the density-dependent growth arrest was studied in JA3 cells stably transfected with a calpastatin form permanently localized in cytosol. In calpastatin overexpressing cells, cell cycle rate is 50% reduced, and cells enter the ungrowing, still fully reversible, stage at a 3-fold higher cell density. Furthermore, in cell density growth arrest phase, down regulation of alpha- and theta-PKC isoforms, as well as FAK and talin occurs. In calpastatin overexpressing cells, degradation of these calpain substrate proteins is prevented and delayed. Thus, calpain activity plays a crucial role in inducing the cell entry into a functional quiescent phase.