Per-Arnt-Sim (PAS) domains play a critical role in signal transduction in multidomain proteins by sensing diverse environmental signals and regulating the activity of output domains. Multiple PAS domains are often found within a single protein. The NifL regulatory protein from Azotobacter vinelandii contains tandem PAS domains, the most N-terminal of which, PAS1, contains a FAD cofactor and is responsible for redox sensing, whereas the second PAS domain, PAS2, has no apparent cofactor and its function is unknown. Amino acid substitutions in PAS2 were identified that either lock NifL in a form that constitutively inhibits NifA or that fail to respond to the redox status, suggesting that PAS2 plays a pivotal role in transducing the redox signal from PAS1 to the C-terminal output domains. The isolated PAS2 domain is a homodimer in solution and the subunits are in rapid exchange. PAS2 dimerization is maintained in the redox signal transduction mutants, but is inhibited by substitutions in PAS2 that lock NifL in the inhibitory conformer. Our results support a model for signal transduction in NifL, whereby redox-dependent conformational changes in PAS1 are relayed to the C-terminal domains via changes in the quaternary structure of the PAS2 domain.