In resting muscle, cytoplasmic Mg2+ is a potent inhibitor of Ca2+ release from the sarcoplasmic reticulum (SR). It is thought to inhibit calcium release channels (RyRs) by binding both to low affinity, low specificity sites (I-sites) and to high affinity Ca2+ sites (A-sites) thus preventing Ca2+ activation. We investigate the effects of luminal and cytoplasmic Ca2+ on Mg2+ inhibition at the A-sites of skeletal RyRs (RyR1) in lipid bilayers, in the presence of ATP or modified by ryanodine or DIDS. Mg2+ inhibits RyRs at the A-site in the absence of Ca2+, indicating that Mg2+ is an antagonist and does not simply prevent Ca2+ activation. Cytoplasmic Ca2+ and Cs+ decreased Mg2+ affinity by a competitive mechanism. We describe a novel mechanism for luminal Ca2+ regulation of Ca2+ release whereby increasing luminal [Ca2+] decreases the A-site affinity for cytoplasmic Mg2+ by a noncompetitive, allosteric mechanism that is independent of Ca2+ flow. Ryanodine increases the Ca2+ sensitivity of the A-sites by 10-fold, which is insufficient to explain the level of activation seen in ryanodine-modified RyRs at nM Ca2+, indicating that ryanodine activates independently of Ca2+. We describe a model for ion binding at the A-sites that predicts that modulation of Mg2+ inhibition by luminal Ca2+ is a significant regulator of Ca2+ release from the SR. We detected coupled gating of RyRs due to luminal Ca2+ permeating one channel and activating neighboring channels. This indicated that the RyRs existed in stable close-packed rafts within the bilayer. We found that luminal Ca2+ and cytoplasmic Mg2+ did not compete at the A-sites of single open RyRs but did compete during multiple channel openings in rafts. Also, luminal Ca2+ was a stronger activator of multiple openings than single openings. Thus it appears that RyRs are effectively “immune” to Ca2+ emanating from their own pore but sensitive to Ca2+ from neighboring channels.