Ethylene gas is essential for many developmental processes and stress responses in plants. ETHYLENE INSENSITIVE2 (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)-to-nucleus translocation. ER-tethered EIN2 shows CONSTITUTIVE TRIPLE RESPONSE1 (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 and EIN3-LIKE1-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.