NtcA, highly conserved in cyanobacteria, regulates the expression of a large number of genes involved in nitrogen and carbon metabolisms, photosynthesis, and stress responses. In the filamentous diazotrophic cyanobacterium Anabaena PCC 7120, NtcA is also required for the initiation of heterocyst differentiation, triggered by the accumulation of 2-oxoglutarate (2-OG) following nitrogen starvation. Recent structural studies reveal the binding pocket of 2-OG on each of the two subunits of the NtcA homodimer, and indicate a route of signal transmission upon 2-OG binding. In this study, we studied the effect of mutations of two critical residues in the effector-binding domain of NtcA on heterocyst differentiation. Mutations of these residues could change strongly the ability of NtcA to sense the nitrogen-starvation signal in vivo. As a result of these mutations, the corresponding strains were unable to form any heterocysts, or form a few heterocysts at a very low frequency. Consistent with these phenotypes, these mutations were defective in initiating transcription by the RNA polymerase in the presence of 2-OG as determined by a reconstituted in vitro transcriptional assay. The different effects of the two mutations were consistent with the roles of the two corresponding residues in 2-OG binding highlighted by recent structural analysis of the NtcA-2-OG complex. These studies provided genetic evidence for the importance of the effector-binding domain in the regulatory function of NtcA.