The structure of the cooperative hexameric enzyme ATP sulfurylase from Penicillium chrysogenum bound to its allosteric inhibitor, 3'-phosphoadenosine-5'-phosphosulfate (PAPS), was determined to 2.6 A resolution. This structure represents the low substrate-affinity T-state conformation of the enzyme. Comparison with the high substrate-affinity R-state structure reveals that a large rotational rearrangement of domains occurs as a result of the R-to-T transition. The rearrangement is accompanied by the 17 A movement of a 10-residue loop out of the active site region, resulting in an open, product release-like structure of the catalytic domain. Binding of PAPS is proposed to induce the allosteric transition by destabilizing an R-state-specific salt linkage between Asp 111 in an N-terminal domain of one subunit and Arg 515 in the allosteric domain of a trans-triad subunit. Disrupting this salt linkage by site-directed mutagenesis induces cooperative inhibition behavior in the absence of an allosteric effector, confirming the role of these two residues.