Tumors are phenotypically heterogeneous and include subpopulations of cancer cells with stemlike properties. The natural product salinomycin, a K+-selective ionophore, was recently found to exert selectivity against such cancer stem cells. This selective effect is thought to be due to inhibition of the Wnt signaling pathway, but the mechanistic basis remains unclear. Here, we develop a functionally competent fluorescent conjugate of salinomycin to investigate the molecular mechanism of this compound. By subcellular imaging, we demonstrate a rapid cellular uptake of the conjugate and accumulation in the endoplasmic reticulum (ER). This localization is connected to induction of Ca2+ release from the ER into the cytosol. Depletion of Ca2+ from the ER induces the unfolded protein response as shown by global mRNA analysis and Western blot analysis of proteins in the pathway. In particular, salinomycin-induced ER Ca2+ depletion up-regulates C/EBP homologous protein (CHOP), which inhibits Wnt signaling by down-regulating β-catenin. The increased cytosolic Ca2+ also activates protein kinase C, which has been shown to inhibit Wnt signaling. These results reveal that salinomycin acts in the ER membrane of breast cancer cells to cause enhanced Ca2+ release into the cytosol, presumably by mediating a counter-flux of K+ ions. The clarified mechanistic picture highlights the importance of ion fluxes in the ER as an entry to inducing phenotypic effects and should facilitate rational development of cancer treatments.