The ubiquitous Ca(2+)-sensing protein calmodulin (CaM) fulfills its numerous signaling functions through a wide range of modular binding and activation mechanisms. By activating adenylyl cyclases (ACs) 1 and 8, Ca(2+) acting via calmodulin impacts on the signaling of the other major cellular second messenger cAMP. In possessing two CaM-binding domains, a 1-5-8-14 motif at the N terminus and an IQ-like motif (IQlm) at the C terminus, AC8 offers particularly sophisticated regulatory possibilities. The IQlm has remained unexplored beyond the suggestion that it bound CaM, and the larger C2b region of which it is part was involved in the relief of autoinhibition of AC8. Here we attempt to distinguish the function of individual residues of the IQlm. From a complementary approach of in vitro and cell population AC activity assays, as well as CaM binding, we propose that the IQlm alone, and not the majority of the C2b, imparts CaM binding and autoinhibitory functions. Moreover, this duality of function is spatially separated and depends on amino acid side-chain character. Accordingly, residues critical for CaM binding are positively charged and clustered toward the C terminus, and those essential for the maintenance of autoinhibition are hydrophobic and more N-terminal. Secondary structure prediction of the IQlm supports this separation, with an ideally placed break in the alpha-helical nature of the sequence. We additionally find that the N and C termini of AC8 interact, which is an association specifically abrogated by fully Ca(2+)-bound, but not Ca(2+)-free, CaM. These data support a sophisticated activation mechanism of AC8 by CaM, in which the duality of the IQlm function is critical.