The major sensor kinase controlling the initiation of development in Bacillus subtilis, KinA, functions by activating the phosphorelay signal-transduction system in response to as yet unknown signal ligands. KinA contains, within its amino-terminal signal-sensing region, three PAS domains that, in other proteins, are known to be involved in sensing changes in oxygen concentration and redox potential among other functions. The most amino-terminal PAS domain, PAS-A, was found to bind ATP and catalyze exchange of phosphate between ATP and nucleoside diphosphates. A cysteine-to-alanine mutation in PAS-A increased the affinity for ATP 5-fold, decreased the exchange reaction 2-fold, and stimulated KinA-dependent sporulation. A model for the role of ATP and the exchange reaction in the PAS domain in sensor kinase signal transduction is presented in which the free energy of nucleotide hydrolysis drives the conformational changes that activate or deactivate the sensor kinase in response to signal ligand binding.