Although molecular mechanisms of allosteric regulation in the Hsp70 chaperones have been extensively studied at both structural and functional levels, the current understanding of allosteric inhibition of chaperone activities by small molecules is still lacking. In the current study, using a battery of computational approaches, we probed allosteric inhibition mechanisms of E. coli Hsp70 (DnaK) and human Hsp70 proteins by small molecule inhibitors PET-16 and novolactone. Molecular dynamics simulations and binding free energy analysis were combined with network-based modeling of residue interactions and allosteric communications to systematically characterize and compare molecular signatures of the apo form, substrate-bound, and inhibitor-bound chaperone complexes. The results suggested a mechanism by which the allosteric inhibitors may leverage binding energy hotspots in the interaction networks to stabilize a specific conformational state and impair the interdomain allosteric control. Using the network-based centrality analysis and community detection, we demonstrated that substrate binding may strengthen the connectivity of local interaction communities, leading to a dense interaction network that can promote an efficient allosteric communication. In contrast, binding of PET-16 to DnaK may induce significant dynamic changes and lead to a fractured interaction network and impaired allosteric communications in the DnaK complex. By using a mechanistic-based analysis of distance fluctuation maps and allosteric propensities of protein residues, we determined that the allosteric network in the PET-16 complex may be small and localized due to the reduced communication and low cooperativity of the substrate binding loops, which may promote the higher rates of substrate dissociation and the decreased substrate affinity. In comparison with the significant effect of PET-16, binding of novolactone to HSPA1A may cause only moderate network changes and preserve allosteric coupling between the allosteric pocket and the substrate binding region. The impact of novolactone on the conformational dynamics and allosteric communications in the HSPA1A complex was comparable to the substrate effect, which is consistent with the experimental evidence that PET-16, but not novolactone binding, can significantly decrease substrate affinity. We argue that the unique dynamic and network signatures of PET-16 and novolactone may be linked with the experimentally observed functional effects of these inhibitors on allosteric regulation and substrate binding.