The INTEGRATE system is a gene-editing approach that offers advantages over the widely used CRISPR-Cas9 system. It does not introduce double strand breaks in the target DNA but rather integrates the desired DNA sequence directly into it. The first step in the integration process is PAM recognition, which is critical to understanding and optimizing the system. Experimental testing revealed varying integration efficiencies of different PAM mutants, and computational simulations were carried out to gain mechanistic insight into the conformational changes of Cas8 during PAM recognition. Our results showed that the interaction between Arg246 and Guanine at position (-1) of the target strand is critical for PAM recognition. We found that unfavorable interactions in the 5’-AC-3’ PAM mutant disrupted this interaction and may be responsible for its 0% integration efficiency. Additionally, we discovered that PAM sequences not only initiate the integration process but also regulate it through an allosteric mechanism that connects the N-terminal domain and the helical bundle of Cas8. This allosteric regulation was present in all PAMs tested, even those with lower integration efficiencies, such as 5’-TC-3’ and 5’-AC-3’. We identified the Cas8 residues that are involved in this regulation. Our findings provide valuable insights into PAM recognition mechanisms in the INTEGRATE system and can help improve the gene-editing technology.