Siderocalin Q83 is a small soluble protein that has the ability to bind two different ligands (enterobactin and arachidonic acid) simultaneously in two distinct binding sites. Here we report that Q83 exhibits an intriguing dynamic behavior. In its free form, the protein undergoes significant micro-to-millisecond dynamics. When binding arachidonic acid, the motions of the arachidonic acid binding site are quenched while the dynamics at the enterobactin binding site increases. Reciprocally, enterobactin binding to Q83 quenches the motions at the enterobactin binding site and increases the slow dynamics at the arachidonic acid binding site. Additionally, in the enterobactin-bound state, the excited state of the arachidonic acid binding site resembles the arachidonic acid-bound state. These observations strongly suggest an allosteric regulation where binding of one ligand enhances the affinity of Q83 for the other one. Additionally, our data strengthen the emerging view of proteins as dynamic ensembles interconverting between different sub-states with distinct functionalities.