Spine Ca2+ is critical for the induction of synaptic plasticity, but the factors that control Ca2+ handling in dendritic spines under physiological conditions are largely unknown. We studied [Ca2+] signaling in dendritic spines of CA1 pyramidal neurons and find that spines are specialized structures with low endogenous Ca2+ buffer capacity that allows large and extremely rapid [Ca2+] changes. Under physiological conditions, Ca2+ diffusion across the spine neck is negligible, and the spine head functions as a separate compartment on long time scales, allowing localized Ca2+ buildup during trains of synaptic stimuli. Furthermore, the kinetics of Ca2+ sources governs the time course of [Ca2+] signals and may explain the selective activation of long-term synaptic potentiation (LTP) and long-term depression (LTD) by NMDA-R-mediated synaptic Ca2+.