The control of cellular physiology and gene expression in response to extracellular signals is a basic property of living systems. We have constructed a synthetic bacterial signal transduction pathway in which gene expression is controlled by extracellular Zn2+. In this system a computationally designed Zn2+-binding periplasmic receptor senses the extracellular solute and triggers a two-component signal transduction pathway via a chimeric transmembrane protein, resulting in transcriptional up-regulation of a beta-galactosidase reporter gene. The Zn2+-binding site in the designed receptor is based on a four-coordinate, tetrahedral primary coordination sphere consisting of histidines and glutamates. In addition, mutations were introduced in a secondary coordination sphere to satisfy the residual hydrogen-bonding potential of the histidines coordinated to the metal. The importance of the secondary shell interactions is demonstrated by their effect on metal affinity and selectivity, as well as protein stability. Three designed protein sequences, comprising two distinct metal-binding positions, were all shown to bind Zn2+ and to function in the cell-based assay, indicating the generality of the design methodology. These experiments demonstrate that biological systems can be manipulated with computationally designed proteins that have drastically altered ligand-binding specificities, thereby extending the repertoire of genetic control by extracellular signals.