Downstream regulatory antagonist modulator (DREAM) is a calcium sensing protein that co-assembles with KV4 potassium channels to regulate ion currents as well as with DNA in the nucleus, where it regulates gene expression. The interaction of DREAM with A-type KV4 channels and DNA has been shown to regulate neuronal signaling, pain sensing, and memory retention. The role of DREAM in modulation of pain, onset of Alzheimer’s disease, and cardiac pacemaking has set this protein as a novel therapeutic target. Moreover, previous results have shown a Ca2+ dependent interaction between DREAM and KV4/DNA involving surface contacts at the N-terminus of DREAM. However, the mechanisms by which Ca2+ binding at the C-terminus of DREAM induces structural changes at the C- and N-terminus remain unknown. Here, we present the use of biophysics and biochemistry techniques in order to map the interactions of DREAM and numerous small synthetic ligands as well as KV channels. We further demonstrate that a highly conserved network of aromatic residues spanning the C- and N-terminus domains control protein dynamics and the pathways of signal transduction on DREAM. Using molecular dynamics simulations, site directed mutagenesis, and fluorescence spectroscopy we provide strong evidence in support of a highly dynamic mechanism of signal transduction and regulation. A set of aromatic amino acids including Trp169, Phe171, Tyr174, Phe218, Phe235, Phe219, and Phe252 are identified to form a dynamic network involved in propagation of Ca2+ induced structural changes. These amino acids form a hydrophobic network connecting the N- and C-terminus domains of DREAM and are well conserved in other neuronal calcium sensors. In addition, we show evidence in support of a mechanism in which Ca2+ signals are propagated towards the N-terminus and ultimately lead to the rearrangement of the inactive EF-hand 1. The observed structural motions provide a novel mechanism involved in control of the calcium dependent KV4 and DNA binding. Altogether, we provide the first mechanism of intramolecular and intermolecular signal transduction in a Ca2+ binding protein of the neuronal calcium sensor family.