The lactose repressor protein (LacI), a prototypic negative transcriptional regulator in E. coli, relies on an allosteric conformational change for its function. Targeted molecular dynamics (TMD) simulation of this LacI transition predicts that residues located in/near the inducer binding pocket, especially D149 and S193, play a critical role in the early stage of this allosteric process. Single mutants at D149 and S193, characterized by a series of biochemical and biophysical experiments, present limited information about LacI allostery. In contrast, double mutants are much more informative: D149A/S193A exhibits wild-type properties, which exclude the requirement for inter-residue hydrogen bond formation in the allosteric response. However, D149C/S193C purified from cell extracts shows decreased sensitivity to inducer binding, while retaining wild-type binding affinities for both operator and inducer. By manipulating cysteine oxidation, the more reduced state of D149C/S193C responds to inducer more similarly to wild-type protein, whereas the more oxidized state displays diminished inducer sensitivity. D149C/S193C exhibits near wild-type binding parameters for operator DNA and inducer, with comparable rate constants for binding to IPTG and dissociation from operator DNA. These features of D149C/S193C indicate that the novel disulfide bond formed in this mutant impedes the allosteric transition, consistent with the role of this region predicted by TMD simulation. V150C/V192C displays wild-type binding properties, presumably due to its reduced state. Interestingly, S151C/V192C in a partially oxidized state displays wild-type DNA and IPTG binding affinities, and retains normal response to IPTG binding. These data suggest that mobility of the entire flexible loop (residues 149-156) may not be the crucial element for Lad allosteric regulation. Further, a molecular dynamics simulation method was used to probe the motions that are necessary for the conformational change in LacI. The results of this simulation indicate that the backbone of residue 149 is the feature that may play a critical role in LacI allosteric regulation. In summary, biochemical characterization and computational simulation of multiple LacI mutants provide evidence for the functional roles of specific residues (and their interaction) and shed light on LacI allostery.