Transmembrane signaling proteins couple extracytosolic sensors to cytosolic effectors. Here, we examine how binding of Mg2+ to the sensor domain of an E. coli two component histidine kinase (HK), PhoQ, modulates its cytoplasmic kinase domain. We use cysteine-crosslinking and reporter-gene assays to simultaneously and independently probe the signaling state of PhoQ's sensor and autokinase domains in a set of over 30 mutants. Strikingly, conservative single-site mutations distant from the sensor or catalytic site strongly influence PhoQ's ligand-sensitivity as well as the magnitude and direction of the signal. Data from 35 mutants are explained by a semi-empirical three-domain model in which the sensor, intervening HAMP, and catalytic domains can adopt kinase-promoting or inhibiting conformations that are in allosteric communication. The catalytic and sensor domains intrinsically favor a constitutively 'kinase-on' conformation, while the HAMP domain favors the 'off' state; when coupled, they create a bistable system responsive to physiological concentrations of Mg2+. Mutations alter signaling by locally modulating domain intrinsic equilibrium constants and interdomain couplings. Our model suggests signals transmit via interdomain allostery rather than propagation of a single concerted conformational change, explaining the diversity of signaling structural transitions observed in individual HK domains.