Polypeptide folding and quality control in the endoplasmic reticulum (ER) are mediated by protein chaperones, including calreticulin (CRT). ER localization of CRT is specified by two types of targeting signals, an N-terminal hydrophobic signal sequence that directs insertion into the ER and a C-terminal KDEL sequence that is responsible for retention in the ER. CRT has been implicated in a number of cytoplasmic and nuclear processes, suggesting that there may be a pathway for generating cytosolic CRT. Here we show that CRT is fully inserted into the ER, undergoes processing by signal peptidase, and subsequently undergoes retrotranslocation to the cytoplasm. A transcription-based reporter assay revealed an important role for the C-terminal Ca²⁺ binding domain in CRT retrotranslocation. Neither ubiquitylation nor proteasome activity was necessary for retrotranslocation, which indicates that the pathway is different from that used by unfolded proteins targeted for destruction. Forced expression of cytosolic CRT is sufficient to rescue a cell adhesion defect observed in mouse embryo fibroblasts from crt^−/− mice. The ability of CRT to retrotranslocate from the ER lumen to the cytosol explains how CRT can change compartments and modulate cell adhesion, transcription, and translation.