Modulation of cytoplasmic free Ca2+ concentration ([Ca2+]i) by receptor-mediated generation of inositol 1,4,5-trisphosphate (InsP3) and activation of its receptor (InsP3R), a Ca2+-release channel in the endoplasmic reticulum, is a ubiquitous signalling mechanism. A fundamental aspect of InsP3-mediated signalling is the graded release of Ca2+ in response to incremental levels of stimuli. Ca2+ release has a transient fast phase, whose rate is proportional to [InsP3], followed by a much slower one even in constant [InsP3]. Many schemes have been proposed to account for quantal Ca2+ release, including the presence of heterogeneous channels and Ca2+ stores with various mechanisms of release termination. Here, we demonstrate that mechanisms intrinsic to the single InsP3R channel can account for quantal Ca2+ release. Patch-clamp electrophysiology of isolated insect Sf9 cell nuclei revealed a consistent and high probability of detecting functional endogenous InsP3R channels, enabling InsP3-induced channel inactivation to be identified as an inevitable consequence of activation, and allowing the average number of activated channels in the membrane patch (N(A)) to be accurately quantified. InsP3-activated channels invariably inactivated, with average duration of channel activity reduced by high [Ca2+]i and suboptimal [InsP3]. Unexpectedly, N(A) was found to be a graded function of both [Ca2+]i and [InsP3]. A qualitative model involving Ca2+-induced InsP3R sequestration and inactivation can account for these observations. These results suggest that apparent heterogeneous ligand sensitivity can be generated in a homogeneous population of InsP3R channels, providing a mechanism for graded Ca2+ release that is intrinsic to the InsP3R Ca2+ release channel itself.