HAMP domains connect extracellular sensory with intracellular signaling domains in over 7500 proteins, including histidine kinases, adenylyl cyclases, chemotaxis receptors, and phosphatases. The solution structure of an archaeal HAMP domain shows a homodimeric, four-helical, parallel coiled coil with unusual interhelical packing, related to the canonical packing by rotation of the helices. This suggests a model for the mechanism of signal transduction, in which HAMP alternates between the observed conformation and a canonical coiled coil. We explored this mechanism in vitro and in vivo using HAMP domain fusions with a mycobacterial adenylyl cyclase and an E. coli chemotaxis receptor. Structural and functional studies show that the equilibrium between the two forms is dependent on the side-chain size of residue 291, which is alanine in the wild-type protein.