Calpain is a Ca²⁺-activated proteolytic enzyme found to be involved in neurodegeneration in a variety of diseases and disorders of the central nervous system (CNS). Many calpain homologs have recently been discovered. Depending on the tissue distribution, calpains can be broadly classified as ubiquitous and tissue-specific. Ubiquitous calpain isoforms, μ-calpain and m-calpain, are abundant in the CNS. Calpastatin, an endogenous protein inhibitor, regulates the activity of ubiquitous calpain. Molecular structures of calpain and calpastatin have been deduced from cDNA cloning. Precise physiological functions of calpain remain yet to be explored. However, experimental evidence strongly suggests that calpain plays an important role in the pathogenesis of various diseases and disorders. The increase in intracellular free Ca²⁺ levels in course of diseases and injuries in the CNS causes overactivation of calpain, promoting degradation of key cytoskeletal and membrane proteins leading to neurodegeneration. Cell-permeable calpain inhibitors are being developed by semi-synthetic and synthetic procedures for pharmacological inhibition of calpain activity. Some of the calpain inhibitors have already provided significant neuroprotection in animal models of the CNS disease and trauma, indicating their potential therapeutic value.