Downstream Regulatory Element Antagonist Modulator (DREAM) is a member of the neuronal calcium sensor family that controls activity of potassium voltage channels and regulates c-fos and prodynorphine gene transcription in a Ca2+ dependent manner. Here, we have investigated the impact of Mg2+ and Ca2+ binding on the structure, stability and dynamics of DREAM and DREAM C-terminal domain (DREAM-C). Mg2+ binding to the apoDREAM does not alter the secondary or tertiary structure as based on CD and Trp emission spectra whereas the association of Mg2+ to either EF-3 or EF-4 in apoDREAM-C results in an increase in protein secondary structure and alteration of the tertiary structure. Ca2+ binding to either apo- or Mg2+DREAM and apo- or Mg2+DREAM-C triggers larger conformational changes as evident from the blue-shift in emission spectra and the decrease of Stern-Volmer constant. Ca2+ triggered changes in DREAM conformational dynamics were characterized by time-resolved fluorescence. In apoDREAM, single tryptophan residue exhibits two lifetimes (τ1=3.38 ns, f1=73% and τ2=7.72 ns, f2=27%). Ca2+ binding to apo- and Mg2+DREAM leads to the shortening of the first lifetime and decrease of the fractional contribution (τ1 = 1.75 ns, f1 = 47% and τ2 = 7. ns, f2 = 53%). Furthermore, the impact of Ca2+/Mg2+ on DREAM stability was determined in equilibrium folding studies. The binding of Ca2+ increase the protein stability by ∼ 7 kcal mol−1 whereas the impact of Mg2+ on DREAM stability is significantly smaller, ∼ 1 kcal mol−1. The stability of the C terminal domain in both apo and Ca2+ bound form is significantly smaller compared to the full length protein, suggesting that the inter-domain interactions significantly contribute to the structural and functional properties of DREAM.