Magnesium is an essential ion for numerous physiological processes. MgtE is a Mg2+ selective channel involved in the maintenance of intracellular Mg2+ homeostasis, whose gating is regulated by intracellular Mg2+ levels. Here, we report that ATP binds to MgtE, regulating its Mg2+-dependent gating. Crystal structures of MgtE-ATP complex show that ATP binds to the intracellular CBS domain of MgtE. Functional studies support that ATP binding to MgtE enhances the intracellular domain affinity for Mg2+ within physiological concentrations of this divalent cation, enabling MgtE to function as an in vivo Mg2+ sensor. ATP dissociation from MgtE upregulates Mg2+ influx at both high and low intracellular Mg2+ concentrations. Using site-directed mutagenesis and structure based-electrophysiological and biochemical analyses, we identify key residues and main structural changes involved in the process. This work provides the molecular basis of ATP-dependent modulation of MgtE in Mg2+ homeostasis.MgtE is an Mg2+ transporter involved in Mg2+ homeostasis. Here, the authors report that ATP regulates the Mg+2-dependent gating of MgtE and use X-ray crystallography combined with functional studies to propose the molecular mechanisms involved in this process.