ATF6, a member of the leucine zipper protein family, can constitutively induce the promoter of glucose-regulated protein (grp) genes through activation of the endoplasmic reticulum (ER) stress element (ERSE). To understand the mechanism of grp78 induction by ATF6 in cells subjected to ER calcium depletion stress mediated by thapsigargin (Tg) treatment, we discovered that ATF6 itself undergoes Tg stress-induced changes. In nonstressed cells, ATF6, which contains a putative short transmembrane domain, is primarily associated with the perinuclear region. Upon Tg stress, the ATF6 protein level dropped initially but quickly recovered with the additional appearance of a faster-migrating form. This new form of ATF6 was recovered as soluble nuclear protein by biochemical fractionation, correlating with enhanced nuclear localization of ATF6 as revealed by immunofluorescence. Optimal ATF6 stimulation requires at least two copies of the ERSE and the integrity of the tripartite structure of the ERSE. Of primary importance is a functional NF-Y complex and a high-affinity NF-Y binding site that confers selectivity among different ERSEs for ATF6 inducibility. In addition, we showed that YY1 interacts with ATF6 and in Tg-treated cells can enhance ATF6 activity. The ERSE stimulatory activity of ATF6 exhibits properties distinct from those of human Ire1p, an upstream regulator of the mammalian unfolded protein response. The requirement for a high-affinity NF-Y site for ATF6 but not human Ire1p activity suggests that they stimulate the ERSE through diverse pathways.