TG2 (transglutaminase 2) is a calcium-dependent protein cross-linking enzyme which is involved in a variety of cellular processes. The threshold level of calcium needed for endogenous and recombinant TG2 activity has been controversial, the former being more sensitive to calcium than the latter. In the present study we address this question by identifying a single amino acid change from conserved valine to glycine at position 224 in recombinant TG2 compared with the endogenous sequence present in the available genomic databases. Substituting a valine residue for Gly224 in the recombinant TG2 increased its calcium-binding affinity and transamidation activity 10-fold and isopeptidase activity severalfold, explaining the inactivity of widely used recombinant TG2 at physiological calcium concentrations. ITC (isothermal titration calorimetry) measurements showed 7-fold higher calcium-binding affinities for TG2 valine residues which could be activated inside cells. The two forms had comparable substrate- and GTP-binding affinities and also bound fibronectin similarly, but coeliac antibodies had a higher affinity for TG2 valine residues. Structural analysis indicated a higher stability for TG2 valine residues and a decrease in flexibility of the calcium-binding loop resulting in improved metal-binding affinity. The results of the present study suggest that Val224 increases TG2 activity by modulating its calcium-binding affinity enabling transamidation reactions inside cells.