Calexcitin (CE) is a calcium sensor protein that has been implicated in associative learning through the Ca(2+)-dependent inhibition of K(+) channels and activation of ryanodine receptors. CE(B), the major CE variant, was identified as a member of the sarcoplasmic Ca(2+) binding protein family: proteins that can bind both Ca(2+) and Mg(2+). We have now determined the intrinsic Ca(2+) and Mg(2+) binding affinities of CE(B) and investigated their interplay on the folding and structure of CE(B). We find that urea denaturation of CE(B) displays a three-state unfolding transition consistent with the presence of two structural domains. Through a combination of spectroscopic and denaturation studies we find that one domain likely possesses molten globule structure and contains a mixed Ca(2+)/Mg(2+) binding site and a Ca(2+) binding site with weak Mg(2+) antagonism. Furthermore, ion binding to the putative molten globule domain induces native structure formation. The other domain contains a single Ca(2+)-specific binding site and has native structure, even in the absence of ion binding. Ca(2+) binding to CE(B) induces the formation of a recessed hydrophobic pocket. On the basis of measured ion binding affinities and intracellular ion concentrations, it appears that Mg(2+)-CE(B) represents the resting state and Ca(2+)-CE(B) corresponds to the active state, under physiological conditions.