Allosteric regulation of protein activity is a fundamental principle for the temporal and spatial control of cellular function. Transfer of such principles to rational design of proteins will pave the way for biotechnological applications were control of a given process with external cues is desirable. Through a semi-rational and directed evolution approach we have been able to design a calcium dependent molecular switch with distinct “on” and “off” states decided by the presence and absence of calcium, respectively. The design was established in the context of protein-protein interactions with antibodies which is a massive biotechnological application linked to purification of therapeutic antibodies. Our approach was to introduce a randomized calcium binding loop into the C2 domain of Streptococcal Protein G. The large ensemble of different sequences was displayed on the surface of E. coli and subjected to selective pressures for binding to a human FAB in the presence but not in the absence of calcium. From this directed evolution experiment we discovered evolved variants that contained calcium switches with distinct “on” and “off” behavior towards FAB binding. The molecular mechanism underlying the calcium switch was discovered from quantification of both structure and dynamics with NMR spectroscopy. We found the designed protein was partially disordered in the absence of calcium, and that the disordered segment corresponded to the calcium loop and part of the FAB interaction surface of the parental C2 domain. In presence of calcium both the calcium binding loop and the FAB surface became fully structured and as a consequence the FAB binding activity was restored. Therefore, the calcium-switch in our designed protein is dictated by a “coupled folding and binding” mechanism, a principle that has evolved over and over again under natural selection in for instance intrinsically disordered proteins.