Allosteric regulation is used as a very efficient mechanism to control protein activity in most biological processes, including signal transduction, metabolism, catalysis and gene regulation. Allosteric proteins can exist in several conformational states with distinct binding or enzymatic activity. Effectors are considered to function in a purely structural manner by selectively stabilizing a specific conformational state, thereby regulating protein activity. Here we show that allosteric proteins can be regulated predominantly by changes in their structural dynamics. We have used NMR spectroscopy and isothermal titration calorimetry to characterize cyclic AMP (cAMP) binding to the catabolite activator protein (CAP), a transcriptional activator that has been a prototype for understanding effector-mediated allosteric control of protein activity. cAMP switches CAP from the 'off' state (inactive), which binds DNA weakly and non-specifically, to the 'on' state (active), which binds DNA strongly and specifically. In contrast, cAMP binding to a single CAP mutant, CAP-S62F, fails to elicit the active conformation; yet, cAMP binding to CAP-S62F strongly activates the protein for DNA binding. NMR and thermodynamic analyses show that despite the fact that CAP-S62F-cAMP(2) adopts the inactive conformation, its strong binding to DNA is driven by a large conformational entropy originating in enhanced protein motions induced by DNA binding. The results provide strong evidence that changes in protein motions may activate allosteric proteins that are otherwise structurally inactive.