PAS domains, which have been identified in over 1100 proteins from all three kingdoms of life, convert various input stimuli into signals that propagate to downstream components by modifying protein-protein interactions. One such protein is the Escherichia coli redox sensor, Ec DOS, a phosphodiesterase that degrades cyclic adenosine monophosphate in a redox-dependent manner. Here we report the crystal structures of the heme PAS domain of Ec DOS in both inactive Fe(3+) and active Fe(2+) forms at 1.32 and 1.9 A resolution, respectively. The protein folds into a characteristic PAS domain structure and forms a homodimer. In the Fe(3+) form, the heme iron is ligated to a His-77 side chain and a water molecule. Heme iron reduction is accompanied by heme-ligand switching from the water molecule to a side chain of Met-95 from the FG loop. Concomitantly, the flexible FG loop is significantly rigidified, along with a change in the hydrogen bonding pattern and rotation of subunits relative to each other. The present data led us to propose a novel redox-regulated molecular switch in which local heme-ligand switching may trigger a global "scissor-type" subunit movement that facilitates catalytic control.