We report the effects of binding of Mg(2+) to the second Ca(2+)-binding domain (CBD2) of the sodium-calcium exchanger. CBD2 is known to bind two Ca(2+) ions using its Ca(2+)-binding sites I and II. Here, we show by nuclear magnetic resonance (NMR), circular dichroism, isothermal titration calorimetry, and mutagenesis that CBD2 also binds Mg(2+) at both sites, but with significantly different affinities. The results from Mg(2+)-Ca(2+) competition experiments show that Ca(2+) can replace Mg(2+) from site I, but not site II, and that Mg(2+) binding affects the affinity for Ca(2+). Furthermore, thermal unfolding circular dichroism data demonstrate that Mg(2+) binding stabilizes the domain. NMR chemical shift perturbations and (15)N relaxation data reveal that Mg(2+)-bound CBD2 adopts a state intermediate between the apo and fully Ca(2+)-loaded forms. Together, the data show that at physiological Mg(2+) concentrations CBD2 is loaded with Mg(2+) preferentially at site II, thereby stabilizing and structuring the domain and altering its affinity for Ca(2+).