Synaptotagmin serves as the major Ca2+ sensor for regulated exocytosis from neurons. While the mechanism by which synaptotagmin regulates membrane fusion remains unknown, studies using Drosophila indicate that the molecule functions as a multimeric complex and that its second C2 domain is essential for efficient excitation-secretion coupling. Here we describe biochemical data that may account for these phenomena. We report that Ca2+ causes synaptotagmin to oligomerize, primarily forming dimers, via its second C2 domain. This effect is specific for divalent cations that can stimulate exocytosis of synaptic vesicles (Ca2+ > Ba2+, Sr2+ > Mg2+) and occurs with an EC50 value of 3-10 microM Ca2+. In contrast, a separate Ca2+-dependent interaction between synaptotagmin and syntaxin, a component of the fusion apparatus, occurs with an EC50 value of approximately 100 microM Ca2+ and involves the synergistic action of both C2 domains of synaptotagmin. We propose that Ca2+ triggers two consecutive protein-protein interactions: the formation of synaptotagmin dimers at low Ca2+ concentrations followed by the association of synaptotagmin dimers with syntaxin at higher Ca2+-concentrations. Our findings, in conjunction with physiological studies, indicate that the Ca2+-induced dimerization of synaptotagmin is important for the efficient regulation of exocytosis by Ca2+.