Consistent with the conformational coupling mechanism, which suggests that store-operated channels are activated via physical interactions with intracellular calcium release channels, previous studies have demonstrated a functional coupling and a physical interaction between the transient receptor potential canonical type 3 (TRPC3) and inositol 1,4,5-trisphosphate receptor (IP3R). The IP3R-TRPC binding domains were determined using in vitro binding assays. This work aimed to study the effect of IP3R-TRPC interaction on TRPC function. Pull-down experiments were used to study the binding of TRPC to IP3R and to calmodulin. Patch clamp recordings in whole-cell and inside-out configurations were used to examine the effect of a TRPC-binding IP3R fragment, Ca2+ and calmodulin on TRPC activity. We found that IP3R and calmodulin compete for a common binding site at the TRPC C-terminus. TRPC channels are activated either by a peptide representing the TRPC-binding domain of IP3R or by inactivation of calmodulin from the excised membrane patches. TRPC3 activity is inhibited by Ca2+ and calmodulin. Therefore, we have identified a critical IP3R-TRPC interaction that is involved in the activation of TRPC-formed channels. We propose that IP3Rs activate TRPC channels by displacing inhibitory calmodulin from a common calmodulin-IP3R binding site located at the C-terminus of TRPC.