Allosteric regulation is a fundamental mechanism of biological control. Here, we investigated the allosteric mechanism by which GTP inhibits cross-linking activity of transglutaminase 2 (TG2), a multifunctional protein, with postulated roles in receptor signaling, extracellular matrix assembly, and apoptosis. Our findings indicate that at least two components are involved in functionally coupling the allosteric site and active center of TG2, namely (i) GTP binding to mask a conformationally destabilizing switch residue, Arg-579, and to facilitate interdomain interactions that promote adoption of a compact, catalytically inactive conformation and (ii) stabilization of the inactive conformation by an uncommon H bond between a cysteine (Cys-277, an active center residue) and a tyrosine (Tyr-516, a residue located on a loop of the -barrel 1 domain that harbors the GTP-binding site). Although not essential for GTP-mediated inhibition of cross-linking, this H bond enhances the rate of formation of the inactive conformer.protein conformation ͉ GTP inhibition ͉ transamidase activity A llosteric regulation of enzymes by conformational change is an important means of biological control, involving residues that functionally couple ligand binding at the allosteric site to modification of the catalytic site. Transglutaminase type 2 (TG2), also known as tissue TG or G h (high molecular weight GTP-binding protein), is a multifunctional protein that is allosterically regulated by calcium and GTP (1). TG2 catalyzes calcium-dependent transamidation reactions, resulting in posttranslational amine modification of proteins or cross-linking of interchain glutamine and lysine residues to form N (␥-glutamyl)lysine isopeptide bonds, which confer rigidity and protease resistance on protein complexes (2). TG2 is also a GTPase (3) and mediates intracellular signaling by various G protein-coupled receptors (4-6).GDP-bound human TG2 (7) is comprised of four domains: an N-terminal -sandwich, a core domain in which the transamidase active site catalytic triad (Cys-277, His-335, and Asp-358) and transition-state stabilizing residue (Trp-241) (8) are buried and inaccessible to substrate, and two -barrels. Nucleotide binds mainly to residues from the first and last strands (amino acids 476-482 and 580-583) of -barrel 1 and to two core domain residues (Lys-173 and Phe-174) that protrude on a loop to meet -barrel 1 (7, 9, 10). This is postulated to stabilize two -barrel 1 loops that block access to the catalytic site (7). One of these loops protrudes into the core domain localizing Tyr-516 within hydrogen-bonding distance of Cys-277 (7). This is postulated to prevent Cys-277 interaction with the substrate (7,11,12). Calcium-activated TG2 has unique conformational epitopes (13) and is less compact (14-16) and less resistant to protease digestion (1, 10, 14) than GTP-bound TG2. Allosteric mechanisms governing the conformational switch between transamidase and GTPase functions have yet to be elucidated.Mutation of Arg-579 in rat TG2 (Arg-580 in ...