The sarco(endo)plasmic reticulum calcium ATPase (SERCA) is regulated in a tissue-dependent manner via interaction with the short integral membrane proteins phospholamban (PLN) and sarcolipin (SLN). Although defects in SERCA activity are known to cause heart failure, the regulatory mechanisms imposed by PLN and SLN could have clinical implications for both heart and skeletal muscle diseases. PLN and SLN have significant sequence homology in their transmembrane regions, suggesting a similar mode of binding to SERCA. However, unlike PLN, SLN has a conserved C-terminal luminal tail composed of five amino acids ((27)RSYQY), which may contribute to a distinct SERCA regulatory mechanism. We have functionally characterized alanine mutants of the C-terminal tail of SLN using co-reconstituted proteoliposomes of SERCA and SLN. We found that Arg(27) and Tyr(31) are essential for SLN function. We also tested the effect of a truncated variant of SLN (Arg(27)stop) and extended chimeras of PLN with the five luminal residues of SLN added to its C terminus. The Arg(27)stop form of SLN resulted in loss of function, whereas the PLN chimeras resulted in superinhibition with characteristics of both PLN and SLN. Based on our results, we propose that the C-terminal tail of SLN is a distinct, essential domain in the regulation of SERCA and that the functional properties of the SLN tail can be transferred to PLN.