Trains of spikes encoded by presynaptic neurons are decoded into rises in cytosolic Ca2+ concentration both in presynaptic terminals and in postsynaptic dendrites. Intracellular [Ca2+] rises trigger neurotransmitter release and also induce short- and long-term modifications of synaptic efficacy. These modifications can be potentiation or depression depending on the intensity of stimuli. A dynamic mechanism, "dynamic decoding", is proposed to understand the multiplicity of the functions of Ca2+, based on recent knowledge of Ca2+ binding proteins and of the dynamics of Ca2+ signaling. The dynamic model is in many ways superior to static models, and may be applied to various neuronal functions including the induction of long-term plasticity in cerebral cortex.