Lactose repressor protein (LacI) utilizes an allosteric mechanism to regulate transcription in Escherichia coli, and the transition between inducer- and operator-bound states has been simulated by targeted molecular dynamics (TMD). The side chains of amino acids 149 and 193 interact and were predicted by TMD simulation to play a critical role in the early stages of the LacI conformational change. D149 contacts IPTG directly, and variations at this site provide the opportunity to dissect its role in inducer binding and signal transduction. Single mutants at D149 or S193 exhibit a minimal change in operator binding, and alterations in inducer binding parallel changes in operator release, indicating normal allosteric response. The observation that the double mutant D149A/S193A exhibits wild-type properties excludes the requirement for inter-residue hydrogen bond formation in the allosteric response. The double mutant D149C/S193C purified from cell extracts shows decreased sensitivity to inducer binding while retaining wild-type binding affinities and kinetic constants for both operator and inducer. By manipulating cysteine oxidation, we show that the more reduced state of D149C/S193C responds to inducer more like the wild-type protein, whereas the more oxidized state displays diminished inducer sensitivity. These features of D149C/S193C indicate that the novel disulfide bond formed in this mutant impedes the allosteric transition, consistent with the role of this region predicted by TMD simulation. Together, these results establish the requirement for flexibility in the spatial relationship between D149 and S193 rather than a specific D149-S193 interaction in the LacI allosteric response to inducer.