IRE1-alpha is a single-pass transmembrane protein that resides in the endoplasmic reticulum (ER) membrane. The C-terminus of IRE1-alpha is located in the cytosol; the N-terminus is located in the ER lumen. In unstressed cells IRE1-alpha exists in an inactive heterodimeric complex with BiP such that BiP in the ER lumen binds the N-terminal region of IRE1-alpha. Upon accumulation of unfolded proteins in the ER, BiP binds the unfolded protein and the IRE1-alpha:BiP complex dissociates. The dissociated IRE1-alpha then forms homodimers. Initially the luminal N-terminal regions pair. This is followed by trans-autophosphorylation of IRE1-alpha at Ser724 in the cytosolic C-terminal region. The phosphorylation causes a conformational change that allows the dimer to bind ADP, causing a further conformational change to yield back-to-back pairing of the cytosolic C-terminal regions of IRE1-alpha. The fully paired IRE1-alpha homodimer has endoribonuclease activity and cleaves the mRNA encoding Xbp-1. A 26 residue polyribonucleotide is released and the 5' and 3' fragments of the original Xbp-1 mRNA are rejoined. The spliced Xbp-1 message encodes Xbp-1 (S), a potent activator of transcription. Xbp-1 (S) together with the ubiquitous transcription factor NF-Y bind the ER Stress Responsive Element (ERSE) in a number of genes encoding chaperones. Recent data suggest that the IRE1-alpha homodimer can also cleave specific subsets of mRNAs, including the insulin (INS) mRNA in pancreatic beta cells.