The role of the unique plant calpain Defective Kernel 1 (DEK1) in development has remained unclear due to the severity of mutant phenotypes. Here, we used complementation studies of the embryo-lethal mutant to dissect DEK1 protein behavior and to show that DEK1 plays a key role in growth regulation in Arabidopsis thaliana. We show that although full-length DEK1 protein localizes to membranes, it undergoes intramolecular autolytic cleavage events that release the calpain domain into the cytoplasm. The active calpain domain alone is not only necessary for DEK1 function but is sufficient for full complementation of dek1 mutants. A novel set of phenotypes, including leaf ruffling, increased leaf thickness, and abnormalities of epidermal cell interdigitation, was caused by expression of the constitutively active calpain domain. This analysis of the novel phenotypes produced by DEK1 under- and overexpression, as well as DEK1 subcellular localization and protein processing, has revealed a fundamental role for DEK1-mediated signaling in growth regulation.