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⁺.