High-resolution NMR spectroscopy enabled us to characterize allosteric transitions between various functional states of the dimeric Escherichia coli Lac repressor. In the absence of ligands, the dimer exists in a dynamic equilibrium between DNA-bound and inducer-bound conformations. Binding of either effector shifts this equilibrium toward either bound state. Analysis of the ternary complex between repressor, operator DNA, and inducer shows how adding the inducer results in allosteric changes that disrupt the interdomain contacts between the inducer binding and DNA binding domains and how this in turn leads to destabilization of the hinge helices and release of the Lac repressor from the operator. Based on our data, the allosteric mechanism of the induction process is in full agreement with the well-known Monod–Wyman–Changeux model.