We use all-atom simulations to elucidate the mechanisms underlying conformational switching and allostery within the coat protein of the bacteriophage MS2. Assembly of most icosahedral virus capsids requires that the capsid protein adopts different conformations at precise locations within the capsid. It has been shown that a 19 nucleotide stem loop (TR) from the MS2 genome acts as an allosteric effector, guiding conformational switching of the coat protein during capsid assembly. Since the principal conformational changes occur far from the TR binding site, it is important to understand the molecular mechanism underlying this allosteric communication. To this end, we use all-atom simulations with explicit water combined with a path sampling technique to sample the MS2 coat protein conformational transition, in the presence and absence of TR-binding. The calculations find that TR binding strongly alters the transition free energy profile, leading to a switch in the favored conformation. We discuss changes in molecular interactions responsible for this shift. We then identify networks of amino acids with correlated motions to reveal the mechanism by which effects of TR binding span the protein. We find that TR binding strongly affects residues located at the 5-fold and quasi-sixfold interfaces in the assembled capsid, suggesting a mechanism by which the TR binding could direct formation of the native capsid geometry. The analysis predicts amino acids whose substitution by mutagenesis could alter populations of the conformational substates or their transition rates.