Enzyme inhibition via allostery, in which the ligand binds remotely from the active site, is a poorly understood phenomenon and represents a significant challenge to structure-based drug design. Dipicolinic acid (DPA), a major component of Bacillus spores, is shown to inhibit glutamate racemase from Bacillus anthracis, a monosubstrate/monoproduct enzyme, in a novel allosteric fashion. Glutamate racemase has long been considered an important drug target for its integral role in bacterial cell wall synthesis. The DPA binding mode was predicted via multiple docking studies and validated via site-directed mutagenesis at the binding locus, while the mechanism of inhibition was elucidated with a combination of Blue Native polyacrylamide gel electrophoresis, molecular dynamics simulations, and free energy and pK(a) calculations. Inhibition by DPA not only reveals a novel cryptic binding site but also represents a form of allosteric regulation that exploits the interplay between enzyme conformational changes, fluctuations in the pK(a) values of buried residues and catalysis. The potential for future drug development is discussed.