Voltage-gated Ca2+ channels of the CaV1 family initiate excitation–contraction coupling in cardiac, smooth, and skeletal muscle and are primary targets for regulation by the sympathetic nervous system in the ‘fight-or-flight’ response. In the heart, activation of β-adrenergic receptors greatly increases the L-type Ca2+ current through CaV1.2 channels, which requires phosphorylation by cyclic AMP-dependent protein kinase (PKA) anchored via an A-kinase anchoring protein (AKAP15). Surprisingly, the site of interaction of PKA and AKAP15 lies in the distal C-terminus, which is cleaved from the remainder of the channel by in vivo proteolytic processing. Here we report that the proteolytically cleaved distal C-terminal domain forms a specific molecular complex with the truncated α1 subunit and serves as a potent autoinhibitory domain. Formation of the autoinhibitory complex greatly reduces the coupling efficiency of voltage sensing to channel opening and shifts the voltage dependence of activation to more positive membrane potentials. Ab initio structural modelling and site-directed mutagenesis revealed a binding interaction between a pair of arginine residues in a predicted α-helix in the proximal C-terminal domain and a set of three negatively charged amino acid residues in a predicted helix–loop–helix bundle in the distal C-terminal domain. Disruption of this interaction by mutation abolished the inhibitory effects of the distal C-terminus on CaV1.2 channel function. These results provide the first functional characterization of this autoinhibitory complex, which may be a major form of the CaV1 family Ca2+ channels in cardiac and skeletal muscle cells, and reveal a unique ion channel regulatory mechanism in which proteolytic processing produces a more effective autoinhibitor of CaV1.2 channel function.