Orai1 is a plasma membrane Ca2+ channel involved in store operated calcium entry (SOCE). SOCE can regulate cell growth, exocytosis, gene expression and inflammation. We previously found that short palate lung and nasal epithelial clone 1′s (SPLUNC1) sixth α-helix (α6) bound Orai1 to inhibit SOCE. SPLUNC1 was not proteolytically stable, so we developed ELD607, an 11 amino acid peptide based on SPLUNC1’s α6 region which was more stable and more potent than SPLUNC1/α6. Here, we studied ELD607’s mechanism of action. We overexpressed either Orai1-HA or Orai1-YFP in HEK293T cells to probe ELD607-Orai1 interactions by confocal microscopy. We also measured changes in Fluo-4 fluorescence in a multiplate reader as a marker of cytoplasmic Ca2+ levels. ELD607 internalized Orai1 independently of STIM1. Both 15 min and 3 h exposure to ELD607 similarly depleted Orai1 in the plasma membrane. However, 3 h exposure to ELD607 yielded greater inhibition of SOCE. ELD607 continued to colocalize with Orai1 after internalization and this process was dependent on the presence of the ubiquitin ligase NEDD4.2. Similarly, ELD607 increased the colocalization between Orai1 and ubiquitin. ELD607 also increased the colocalization between Orai1 and Rab5 and 7, but not Rab11, suggesting that Orai1 trafficked through early and late but not recycling endosomes. Finally, ELD607 caused Orai1, but not Orai2, Orai3, or STIM1 to traffic to lysosomes. We conclude that ELD607 rapidly binds to Orai1 and works in an identical fashion as full length SPLUNC1 by internalizing Orai1 and sending it to lysosomes, leading to a decrease in SOCE.