Proteolysis by calpain is a unique posttranslational modification that can change integrity, localization, and activity of endogenous proteins. Two ubiquitous calpains, mu-calpain and m-calpain, are highly expressed in the central nervous system, and calpain substrates such as membrane receptors, postsynaptic density proteins, kinases, and phosphatases are localized to the synaptic compartments of neurons. By selective cleavage of synaptically localized molecules, calpains may play pivotal roles in the regulation of synaptic processes not only in physiological states but also during various pathological conditions. Activation of calpains during sustained synaptic activity is crucial for Ca2+-dependent neuronal functions, such as neurotransmitter release, synaptic plasticity, vesicular trafficking, and structural stabilization. Overactivation of calpain following dysregulation of Ca2+ homeostasis can lead to neuronal damage in response to events such as epilepsy, stroke, and brain trauma. Calpain may also provide a neuroprotective effect from axotomy and some forms of glutamate receptor overactivation. This article focuses on recent findings on the role of calpain-mediated proteolytic processes in potentially regulating synaptic substrates in physiological and pathophysiological events in the nervous system.