Synaptotagmin (Syt) is a family of type I membrane proteins that consists of a single transmembrane domain, a spacer domain, two Ca 2؉ -binding C2 domains, and a short C terminus. We recently showed that deletion of the short C terminus (17 amino acids) of Syt IV prevented the Golgi localization of Syt IV proteins in PC12 cells and induced granular structures of various sizes in the cell body by an unknown mechanism (Fukuda, M., Ibata, K., and Mikoshiba, K. (2001) J. Neurochem. 77, 730 -740). In this study we showed by electron microscopy that these structures are crystalloid endoplasmic reticulum (ER), analyzed the mechanism of its induction, and demonstrated that: (a) mutation or deletion of the evolutionarily conserved WHXL motif in the C terminus of the synaptotagmin family (Syt ⌬C) destabilizes the C2B domain structure (i.e. causes misfolding of the protein), probably by disrupting the formation of stable anti-parallel -sheets between the -1 and -8 strands of the C2B domain; (b) the resulting malfolded proteins accumulate in the ER rather than being transported to other membrane structures (e.g. the Golgi apparatus), with the malfolded proteins also inducing the expression of BiP (immunoglobulin binding protein), one of the ER stress proteins; and (c) the ERs in which the Syt ⌬C proteins have accumulated associate with each other as a result of oligomerization capacity of the synaptotagmin family, because the Syt I⌬C mutant, which lacks oligomerization activity, cannot induce crystalloid ER. Our findings indicate that the conserved WHXL motif is important not only for protein interaction site but for proper folding of the C2B domain.