Allostery is well documented for proteins but less recognized for DNA-protein interactions. Here, we report that specific binding of a protein on DNA is substantially stabilized or destabilized by another protein bound nearby. The ternary complex's free energy oscillates as a function of the separation between the two proteins with a periodicity of ~10 base pairs, the helical pitch of B-form DNA, and a decay length of ~15 base pairs. The binding affinity of a protein near a DNA hairpin is similarly dependent on their separation, which-together with molecular dynamics simulations-suggests that deformation of the double-helical structure is the origin of DNA allostery. The physiological relevance of this phenomenon is illustrated by its effect on gene expression in live bacteria and on a transcription factor's affinity near nucleosomes.