Genetically encoded Ca(2+) indicators are important tools that enable the measurement of Ca(2+) dynamics in a physiologically relevant context. GCaMP2, one of the most robust indicators, is a circularly permutated EGFP (cpEGFP)/M13/calmodulin (CaM) fusion protein that has been successfully used for studying Ca(2+) fluxes in vivo in the heart and vasculature of transgenic mice. Here we describe crystal structures of bright and dim states of GCaMP2 that reveal a sophisticated molecular mechanism for Ca(2+) sensing. In the bright state, CaM stabilizes the fluorophore in an ionized state similar to that observed in EGFP. Mutational analysis confirmed critical interactions between the fluorophore and elements of the fused peptides. Solution scattering studies indicate that the Ca(2+)-free form of GCaMP2 is a compact, predocked state, suggesting a molecular basis for the relatively rapid signaling kinetics reported for this indicator. These studies provide a structural basis for the rational design of improved Ca(2+)-sensitive probes.