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Ethylene gas is essential for many developmental processes and stress responses in plants. EIN2, an NRAMP-like integral membrane protein, plays an essential role in ethylene signaling but its function remains enigmatic. Here, we report that phosphorylation-regulated proteolytic processing of EIN2 triggers its endoplasmic reticulum (ER)–nucleus translocation. ER-tethered EIN2 shows CTR1 kinase-dependent phosphorylation. Ethylene triggers dephosphorylation at several sites and proteolytic cleavage at one of these sites, resulting in nuclear translocation of a carboxyl-terminal EIN2 fragment (EIN2-C′). Mutations that mimic EIN2 dephosphorylation, or inactivate CTR1, show constitutive cleavage and nuclear localization of EIN2-C′, and EIN3/EIL1-dependent activation of ethylene responses. These findings uncover a mechanism of subcellular communication whereby ethylene stimulates phosphorylation-dependent cleavage and nuclear movement of the EIN2-C′ peptide, linking hormone perception and signaling components in the ER with nuclear-localized transcriptional regulators.