The vesicles of fragmented sarcoplasmic reticulum, i.e. the physiological relaxing factor, remove most of the exchangeable Ca bound to actomyosin and myofibrils. The extent to which they remove Ca and the extent to which they inhibit myofibrillar activity are closely correlated. Previous work has shown that those in vitro reactions of actomyosin with ATP which are equivalent to its contraction, i.e. superprecipitation and a high ATPase activity, require the formation of a Ca-actomyosin complex, and that actomyosin after the removal of most of its bound Ca is inhibited by physiological concentrations of ATP. The evidence now suggests that the factor achieves its relaxing effect through the dissociation of the Ca-actomyosin complex and that it has no other direct influence on the biological activity of actomyosin. Experiments, showing that under similar conditions the vesicles of the factor are capable of reducing the concentration of ionized Ca in the surrounding medium to about 0.02 microM and less, suggest that the factor competes successfully with actomyosin for the available Ca through its mechanism of Ca accumulation.