Transglutaminase 2 (TG2) is a highly expressed mammalian enzyme whose biological function is unclear, although its catalytic activity in the small intestine appears necessary for celiac disease (CeD) pathogenesis. While TG2 activity is reversibly regulated by multiple allosteric mechanisms, their roles under fluctuating physiological conditions are not well understood. Here, we demonstrate that extracellular TG2 activity is competitively controlled by the mutually exclusive binding of a high-affinity Ca2+ ion or the formation of a strained disulfide bond. Binding of Ca2+ at the high-affinity site does not activate TG2 per se, but it protects against oxidative enzyme deactivation while preserving the ability of Ca2+ ions to occupy weaker binding sites capable of allosteric TG2 activation. In contrast, disulfide bond formation competitively occludes the high-affinity Ca2+ site while resulting in complete TG2 inactivation. Because both outcomes are comparably favorable under typical extracellular conditions, subtle changes in the availability of redox catalysts or promoters in the extracellular matrix can dramatically alter steady-state TG2 activity. Thus, TG2 harbors a molecular "OR" gate that determines its catalytic fate upon export from cells.