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Although the endoplasmic reticulum (ER) extends throughout axons and axonal ER dysfunction is implicated in numerous neurological diseases, its role at nerve terminals is poorly understood. We developed novel genetically encoded ER-targeted low-affinity Ca(2+) indicators optimized for examining axonal ER Ca(2+). Our experiments revealed that presynaptic function is tightly controlled by ER Ca(2+) content. We found that neuronal activity drives net Ca(2+) uptake into presynaptic ER although this activity does not contribute significantly to shaping cytosolic Ca(2+) except during prolonged repetitive firing. In contrast, we found that axonal ER acts as an actuator of plasma membrane (PM) function: [Ca(2+)]ER controls STIM1 activation in presynaptic terminals, which results in the local modulation of presynaptic function, impacting activity-driven Ca(2+) entry and release probability. These experiments reveal a critical role of presynaptic ER in the control of neurotransmitter release and will help frame future investigations into the molecular basis of ER-driven neuronal disease states.