Recoverin is a Ca2+-regulated signal transduction modulator found in vertebrate retina that has been shown to undergo dramatic conformational changes upon Ca2+ binding to its two functional EF-hand motifs. To elucidate the differential impact of the N-terminal myristoylation as well as occupation of the two Ca2+ binding sites on recoverin structure and function, we have investigated a non-myristoylated E85Q mutant exhibiting virtually no Ca2+ binding to EF-2. Crystal structures of the mutant protein as well as the non-myristoylated wild-type have been determined. Although the non-myristoylated E85Q mutant does not display any functional activity, its three-dimensional structure in the presence of Ca2+ resembles the myristoylated wild-type with two Ca2+ but is quite dissimilar from the myristoylated E85Q mutant. We conclude that the N-terminal myristoyl modification significantly stabilizes the conformation of the Ca2+-free protein (i.e. the T conformation) during the stepwise transition toward the fully Ca2+-occupied state. On the basis of these observations, a refined model for the role of the myristoyl group as an intrinsic allosteric modulator is proposed.