Allostery is well-documented for proteins but less recognized for DNA-protein interactions, in which DNA has been often considered as a mere template providing recognition sequences. Here we report that for two proteins bound on DNA at a separation of tens of base pairs, their DNA binding affinities can be significantly altered. This coupling effect oscillates between positive and negative cooperativity, depending on the separation distance between the two proteins on the DNA. With a DNA hairpin experiment, we provide definitive evidence for the structural basis of DNA allostery. We prove this effect is not due to protein-protein interactions but originates from the distortion of the inter-helical distance along the linker DNA. The oscillation has a periodicity of ∼10 base pairs, the helical pitch of the B-form DNA, and a characteristic decay length of ∼15 base pairs. In the theoretical analysis, we elucidate the relation between the mechanical structural distortion of DNA induced by protein-binding and the free energy coupling measured thermodynamically, providing a complete picture for the origin of DNA allostery. The allosteric coupling between two DNA-bound proteins is found to be ubiquitous, regardless of proteins’ properties, implying its general roles in gene regulation. We demonstrate such DNA allostery affects gene expression levels in live E.coli cells. Pertinent to eukaryotic gene expression, we show that the binding affinity of a transcription factor depends on its separation from nearby nucleosomes. This work provides the first comprehensive study of allostery through DNA, with the understanding of its physical underpinning and ubiquity and biological relevance.