In mammals, xanthine oxidoreductase is synthesized as a dehydrogenase (XDH) but can be readily converted to its oxidase form (XO) either by proteolysis or modification of cysteine residues. The crystal structures of bovine milk XDH and XO demonstrated that atoms in the highly charged active-site loop (Gln-423-Lys-433) around the FAD cofactor underwent large dislocations during the conversion, blocking the approach of the NAD+ substrate to FAD in the XO form as well as changing the electrostatic environment around FAD. Here we identify a unique cluster of amino acids that plays a dual role by forming the core of a relay system for the XDH/XO transition and by gating a solvent channel leading toward the FAD ring. A more detailed structural comparison and site-directed mutagenesis analysis experiments showed that Phe-549, Arg-335, Trp-336, and Arg-427 sit at the center of a relay system that transmits modifications of the linker peptide by cysteine oxidation or proteolytic cleavage to the active-site loop (Gln-423-Lys-433). The tight interactions of these residues are crucial in the stabilization of the XDH conformation and for keeping the solvent channel closed. Both oxidative and proteolytic generation of XO effectively leads to the removal of Phe-549 from the cluster causing a reorientation of the bulky side chain of Trp-336, which then in turn forces a dislocation of Arg-427, an amino acid located in the active-site loop. The conformational change also opens the gate for the solvent channel, making it easier for oxygen to reach the reduced FAD in XO.