Ca(2+)/calmodulin (CaM)-dependent protein kinase II (CaMKII) is a major mediator of cellular Ca(2+) signaling. Several inhibitors are commonly used to study CaMKII function, but these inhibitors all lack specificity. CaM-KIIN is a natural, specific CaMKII inhibitor protein. CN21 (derived from CaM-KIIN amino acids 43-63) showed full specificity and potency of CaMKII inhibition. CNs completely blocked Ca(2+)-stimulated and autonomous substrate phosphorylation by CaMKII and autophosphorylation at T305. However, T286 autophosphorylation (the autophosphorylation generating autonomous activity) was only mildly affected. Two mechanisms can explain this unusual differential inhibitor effect. First, CNs inhibited activity by interacting with the CaMKII T-site (and thereby also interfered with NMDA-type glutamate receptor binding to the T-site). Because of this, the CaMKII region surrounding T286 competed with CNs for T-site interaction, whereas other substrates did not. Second, the intersubunit T286 autophosphorylation requires CaM binding both to the "kinase" and the "substrate" subunit. CNs dramatically decreased CaM dissociation, thus facilitating the ability of CaM to make T286 accessible for phosphorylation. Tat-fusion made CN21 cell penetrating, as demonstrated by a strong inhibition of filopodia motility in neurons and insulin secrection from isolated Langerhans' islets. These results reveal the inhibitory mechanism of CaM-KIIN and establish a powerful new tool for dissecting CaMKII function.