The small IQ motif proteins PEP-19 (62 amino acids) and RC3 (78 amino acids) greatly accelerate the rates of Ca(2+) binding to sites III and IV in the C-domain of calmodulin (CaM). We show here that PEP-19 decreases the degree of cooperativity of Ca(2+) binding to sites III and IV, and we present a model showing that this could increase Ca(2+) binding rate constants. Comparative sequence analysis showed that residues 28 to 58 from PEP-19 are conserved in other proteins. This region includes the IQ motif (amino acids 39-62), and an adjacent acidic cluster of amino acids (amino acids 28-40). A synthetic peptide spanning residues 28-62 faithfully mimics intact PEP-19 with respect to increasing the rates of Ca(2+) association and dissociation, as well as binding preferentially to the C-domain of CaM. In contrast, a peptide encoding only the core IQ motif does not modulate Ca(2+) binding, and binds to multiple sites on CaM. A peptide that includes only the acidic region does not bind to CaM. These results show that PEP-19 has a novel acidic/IQ CaM regulatory motif in which the IQ sequence provides a targeting function that allows binding of PEP-19 to CaM, whereas the acidic residues modify the nature of this interaction, and are essential for modulating Ca(2+) binding to the C-domain of CaM.