Mg2+ binds to calmodulin without inducing the changes in secondary structure that are characteristic of Ca2+ binding, or the exposure of hydrophobic surfaces that are involved in typical Ca2+-dependent target interactions. The binding of Mg2+ does, however, produce significant spectroscopic changes in residues located in the Ca2+-binding loops, and the Mg-calmodulin complex is significantly different from apo-calmodulin in loop conformation. Direct measurement of Mg2+ binding constants, and the effects of Mg2+ on Ca2+ binding to calmodulin, are consistent with specific binding of Mg2+, in competition with Ca2+. Mg2+ increases the thermodynamic stability of calmodulin, and we conclude that under resting, nonstimulated conditions, cellular Mg2+ has a direct role in conferring stability on both domains of apo-calmodulin. Apo-calmodulin binds typical target sequences from skeletal muscle myosin light chain kinase and neuromodulin with Kd ∼ 70–90 nM (at low ionic strength). These affinities are virtually unchanged by 5 mM Mg2+, in marked contrast to the strong enhancement of peptide affinity induced by Ca2+. Under conditions of stimulation and increased [Ca2+], Mg2+ has a role in directing the mode of initial target binding preferentially to the C-domain of calmodulin, due to the opposite relative affinities for binding of Ca2+ and Mg2+ to the two domains. Mg2+ thus amplifies the intrinsic differences of the domains, in a target specific manner. It also contributes to setting the Ca2+ threshold for enzyme activation and increases the importance of a partially Ca2+-saturated calmodulin–target complex that can act as a regulatory kinetic and equilibrium intermediate in Ca2+-dependent target interactions.