In response to numerous pathologic stimuli, the myocardium undergoes a hypertrophic response characterized by increased myocardial cell size and activation of fetal cardiac genes. We show that cardiac hypertrophy is induced by the calcium-dependent phosphatase calcineurin, which dephosphorylates the transcription factor NF-AT3, enabling it to translocate to the nucleus. NF-AT3 interacts with the cardiac zinc finger transcription factor GATA4, resulting in synergistic activation of cardiac transcription. Transgenic mice that express activated forms of calcineurin or NF-AT3 in the heart develop cardiac hypertrophy and heart failure that mimic human heart disease. Pharmacologic inhibition of calcineurin activity blocks hypertrophy in vivo and in vitro. These results define a novel hypertrophic signaling pathway and suggest pharmacologic approaches to prevent cardiac hypertrophy and heart failure.