Astrocytes are well known as glial cells that tile the central nervous system (CNS) and exert essential supportive functions such as maintenance of the extracellular fluid, ions and transmitters, provision of energy metabolites to neurons and response to injury or disease. In addition, there is increasing evidence that astrocytes participate in synaptic function (Araque et al., 1999) and regulate blood flow to meet demands set by neuronal activity (Gordon et al., 2007; Iadecola & Nedergaard, 2007), placing astrocytes in a position to profoundly influence CNS neural function in both health and disease. The combination of timescale and cellular architecture involved in these activities suggests that certain astrocyte functions are regulated by dynamic calcium signalling events occurring in distal astrocyte processes that contact synapses or blood vessels. Recent electrophysiological and imaging studies elegantly demonstrate the synaptic consequences of second messenger signaling in astrocyte processes (Gordon et al., 2009). However, our understanding of astrocyte functions has been hindered by the inability to measure calcium in small volume compartments such as near the membrane and in cell processes. A direct method to monitor calcium signals in astrocyte processes is needed to better understand if, when, where and how astrocytes affect neurons. We report the development of a genetic strategy to monitor real-time astrocyte calcium signaling selectively in near-membrane regions and processes. We found that the genetically encoded calcium sensor, GCaMP2 (Tallini et al., 2006), was not suitable to measure physiological calcium signals in astrocyte processes but was suitable to monitor pharmacologically evoked somatic signals. In order to improve GCaMP2 we tagged it with a membrane-tethering domain, Lck, thereby achieving ~14-fold greater expression levels of Lck-GCaMP2 near the plasma membrane as compared to GCaMP2. Using permeablised cells and applications of buffered calcium solutions we found that Lck-GCaMP2 provided fluorescence readouts of calcium ion concentration with a calcium Kd of 168 ± 27 nM and Hill slope of 4.0 ± 1.0 (n=9), close to previously reported values for GCaMP2 in solution (Tallini et al., 2006). Lck-GCaMP2 was robustly expressed in the plasma membrane and processes of astrocytes and readily reported near membrane calcium signals that were evoked pharmacologically or by action potential mediated neurotransmitter release. We also identified novel, highly localised and frequent spontaneous calcium signals in astrocyte somata and processes, which conventional GCaMP2 failed to detect. Thus, Lck-GCaMP2 provides a genetically targeted calcium sensor to monitor calcium signals in hitherto inaccessible parts of astrocytes including their processes. Targeted and cell specific expression of Lck-GCaMP2 in vivo will help to resolve current controversies and shed new light on the physiological functions of astrocyte calcium dynamics.