The bacterial DNA cytosine methyltransferase M.HhaI sequence-specifically modifies DNA in an S-adenosylmethionine dependent reaction. The enzyme stabilizes the target cytosine (GCGC) into an extrahelical position, with a concomitant large movement of an active site loop involving residues 80-99. We used multidimensional, transverse relaxation-optimized NMR experiments to assign nearly 80% of all residues in the cofactor-bound enzyme form, providing a basis for detailed structural and dynamical characterization. We examined details of the previously unknown effects of the cofactor binding with M.HhaI in solution. Addition of the cofactor results in numerous structural changes throughout the protein, including those decorating the cofactor binding site, and distal residues more than 30 A away. The active site loop is involved in motions both on a picosecond to nanosecond time scale and on a microsecond to millisecond time scale and is not significantly affected by cofactor binding except for a few N-terminal residues. The cofactor also affects residues near the DNA binding cleft, suggesting a role for the cofactor in regulating DNA interactions. The allosteric properties we observed appear to be closely related to the significant amount of dynamics and dynamical changes in response to ligand binding detected in the protein.