Ion channels are pore-forming protein complexes in membranes that play essential roles in a diverse array of biological activities. Ion channel activity is strictly regulated at multiple levels and by numerous cellular events to selectively activate downstream effectors involved in specific biological activities. For example, ions, binding proteins, nucleotides, phosphorylation, the redox state, channel subunit composition have all been shown to regulate channel activity and subsequently allow channels to participate in distinct cellular events. While these forms of modulation are well documented and have been extensively reviewed, in this article, we will first review and summarize channel proteolysis as a novel and quite widespread mechanism for altering channel activity. We will then highlight the recent findings demonstrating that proteolysis profoundly alters Inositol 1,4,5 trisphosphate receptor activity, and then discuss its potential functional ramifications in various developmental and pathological conditions.