The RmFixL-RmFixJ oxygen signal transduction system ensures that a cascade of the Sinorhizobium meliloti nitrogen fixation genes is induced as the concentration of O2 drops below 50 microM in symbiotic nodules. Deoxy-RmFixL is a histidine protein kinase that catalyzes a phosphoryl transfer from ATP to the aspartate 54 residue of RmFixJ; RmFixJ is a response regulator that becomes activated as a transcription factor by phosphorylation. Association of O2 with a heme-binding domain in RmFixL triggers a conformational change that inhibits its kinase activity. Here we consider whether this inhibition is achieved by disrupting binding of either of the substrates, i.e., RmFixJ or ATP, to the RmFixL kinase. The ATP affinities of the oxy and deoxy states were compared via competition of ATP against TNP-nucleotide fluorophores. The influence of O2 on formation of the RmFixL-RmFixJ complex was investigated by fluorescence polarization. Oxygen dramatically inhibited the reaction of the RmFixL-RmFixJ complex with ATP but affected neither ATP binding (Kd approximately 100 microM) nor RmFixL-RmFixJ complex formation (Kd approximately 4 microM), indicating that inhibition of the kinase by the oxy-heme in RmFixL is achieved by inactivating the catalytic site, rather than by blocking the association of this enzyme with either of its substrates. An 8-fold enhancement of the rate of reaction of RmFixL with ATP in a deoxy-RmFixL-D54N RmFixJ complex, compared to that in isolated deoxy-RmFixL, exposes the strength of the allosteric effect of RmFixJ on the reaction. These results clarify the mechanistic roles of the signal and regulatory partner in this signal transduction system.