Cadmium (Cd2+) is a very toxic metal that causes DNA damage, oxidative stress and apoptosis. Despite many studies, the cellular and molecular mechanisms underlying its high toxicity are not clearly understood. We show here that very low doses of Cd2+ cause ER stress in Saccharomyces cerevisiae as evidenced by the induction of the unfolded protein response (UPR) and the splicing of HAC1 mRNA. Furthermore, mutant strains (Δire1 and Δhac1) unable to induce the UPR are hypersensitive to Cd2+, but not to arsenite and mercury. The full functionality of the pathways involved in ER stress response is required for Cd2+ tolerance. The data also suggest that Cd2+-induced ER stress and Cd2+ toxicity are a direct consequence of Cd2+ accumulation in the ER. Cd2+ does not inhibit disulfide bond formation but perturbs calcium metabolism. In particular, Cd2+ activates the calcium channel Cch1/Mid1, which also contributes to Cd2+ entry into the cell. The results reinforce the interest of using yeast as a cellular model to study toxicity mechanisms in eukaryotic cells.