Fur protein plays key roles in regulating numerous genes in bacteria and is essential for intracellular iron concentration regulation. However, atomic level pictures of the iron binding site and its functional mechanism remain to be established. Here we present results of the first quantum chemical investigation of various first- and second-shell models and experimental Mössbauer data of E. Coli Fur, including 1) the first robust evidence that site 2 is the Fe binding site with a 3His/2Glu ligand set, being the first case in non-heme proteins, with computed Mössbauer data in excellent accord with experiment; 2) the first discovery of a conservative hydrogen bonding interaction in the iron binding site based on X-ray and homology structures; 3) the first atomic level hypothesis of active site reorganization upon iron concentration increase, triggering the conformational change needed for its function. These results shall facilitate structural and functional studies of Fur family proteins.