Cell membrane compartmentalization, which is believed to involve association of cholesterol- and glycosphingolipid-enriched membrane rafts, represents an important means of transmitting information across the plasma membrane. We have previously shown that raft association is mediated by the Ca2+-dependent binding of annexin 2 to the plasma membrane. In the present study, we demonstrate that the association of annexins 1 and 2 with the smooth muscle cell membrane can be terminated by their proteolytic cleavage. This proteolysis is thought to be triggered by calpain and occurs at non-raft regions of the plasma membrane. It is critically dependent on the intracellular concentration of free Ca2+ and requires an intact contractile apparatus. Annexins 1 and 2 interact with different membrane microcompartments--the former with non-raft, glycerolipid regions, the latter preferentially with membrane rafts. We demonstrate that PKC and RhoA, major signaling molecules that regulate smooth muscle contraction, are spatially segregated and interact with distinct membrane microcompartments. Proteolysis abolishes annexin binding to the plasma membrane and might result in rearrangement of membrane constituents followed by the interruption of segregation-dependent signaling events.