The allosteric mechanism of Hsp70 molecular chaperones enables ATP binding to the N-terminal nucleotide-binding domain (NBD) to alter substrate affinity to the C-terminal substrate-binding domain (SBD) and substrate binding to enhance ATP hydrolysis. Cycling between ATP-bound and ADP/substrate-bound states requires Hsp70s to visit a state with high ATPase activity and fast on/off kinetics of substrate binding. We have trapped this "allosterically active" state for the E. coli Hsp70, DnaK, and identified how interactions among the NBD, the β subdomain of the SBD, the SBD α-helical lid, and the conserved hydrophobic interdomain linker enable allosteric signal transmission between ligand-binding sites. Allostery in Hsp70s results from an energetic tug-of-war between domain conformations and formation of two orthogonal interfaces: between the NBD and SBD, and between the helical lid and the β subdomain of the SBD. The resulting energetic tension underlies Hsp70 functional properties and enables them to be modulated by ligands and cochaperones and "tuned" through evolution.