Autosomal dominant polycystic kidney disease is caused by mutations in the genes encoding polycystin-1 (PC-1) and polycystin-2 (PC-2). PC-1 cleavage releases its cytoplasmic C-terminal tail (CTT), which enters the nucleus. To determine whether PC-1 CTT cleavage is influenced by PC-2, a quantitative cleavage assay was utilized, in which the DNA binding and activation domains of Gal4 and VP16, respectively, were appended to PC-1 downstream of its CTT domain (PKDgalvp). Cells cotransfected with the resultant PKDgalvp fusion protein and PC-2 showed an increase in luciferase activity and in CTT expression, indicating that the C-terminal tail of PC-1 is cleaved and enters the nucleus. To assess whether CTT cleavage depends upon Ca2+ signaling, cells transfected with PKDgalvp alone or together with PC-2 were incubated with several agents that alter intracellular Ca2+ concentrations. PC-2 enhancement of luciferase activity was not altered by any of these treatments. Using a series of PC-2 C-terminal truncated mutations, we identified a portion of the PC-2 protein that is required to stimulate PC-1 CTT accumulation. These data demonstrate that release of the CTT from PC-1 is influenced and stabilized by PC-2. This effect is independent of Ca2+ but is regulated by sequences contained within the PC-2 C-terminal tail, suggesting a mechanism through which PC-1 and PC-2 may modulate a novel signaling pathway.