The insulin receptor and many other protein kinases are activated by relief of intrasteric inhibition that is regulated by reversible phosphorylation. The changes accompanying activation of the insulin receptor's kinase domain were analyzed using steady-state kinetics, viscometric analysis, and equilibrium binding measurements. Peptide phosphorylation catalyzed by the unphosphorylated basal-state kinase is limited by a slow rate of the chemical step, and the activated enzyme is limited by product release rates. Underlying these changes were a 36-fold increase in the rate constant for the chemical step of the enzyme-catalyzed reaction, a 5-fold increase in the affinity for MgATP, and an 8-fold increase in the affinity for peptide substrate. This results in binding of substrates that is 2.2 kcal/mol more favorable and a free energy barrier for transition state formation that is lowered by 2.1 kcal/mol in the activated enzyme. Therefore, the change in conformational free energy inherent in the protein after autophosphorylation [Bishop, S. M., Ross, J. B. A., and Kohanski, R. A. (1999) Biochemistry 38, 3079−3089] is equally distributed between formation of the substrate ternary complex and formation of the transition state complex.