Objective: Impaired myocyte Ca²⁺ handling is a common characteristic of failing hearts and increases in calcineurin activity, a Ca²⁺-sensitive phosphatase, have been implicated in heart failure phenotype. Transgenic mice with cardiac-specific expression of an active form of calcineurin display depressed function, hypertrophy and heart failure. We examined whether defects in cardiomyocyte Ca²⁺ handling properties contribute to the impaired cardiac function in calcineurin transgenic mice. Methods: The levels of SR Ca²⁺ handling proteins, SR Ca²⁺ transport function and cardiomyocyte mechanics, as well as Ca²⁺ kinetics were examined in mice overexpressing a constitutively active form of calcineurin. Results: Transgenic expression of activated calcineurin catalytic subunit resulted in significant protein increases (66%) in SERCA2 and decreases (35%) in phospholamban, as well as enhanced (∼80%) phospholamban phosphorylation. These alterations in the SR Ca²⁺-transport proteins resulted in increased V_max and Ca²⁺-affinity of SERCA2. The myofibrillar Mg-ATPase activity was also significantly increased at pCa>6.0. The enhanced SR Ca²⁺ handling and Mg-ATPase activity reflected significant elevation in myocyte contractile parameters (3-fold), Ca²⁺ transient amplitude (1.5-fold) and the rate of Ca²⁺ signal decay (2-fold). In contrast, in vivo cardiac function assessed by echocardiography, indicated severely depressed contractility in calcineurin hearts. The apparent disparity in contractile properties between the cellular and multicellular preparations may be partially due to tissue remodeling, including interstitial fibrosis and a marked reduction (45%), dephosphorylation (81%) and redistribution of the gap junctional protein connexin-43, which could compromise intercellular communication. Conclusion: Despite enhanced SR Ca²⁺ handling and contractility in myocytes, pathological remodeling and defects in intercellular coupling may underlie contractile dysfunction of the calcineurin hearts.