Proteins exist in a delicate balance between the native and unfolded states, where thermodynamic stability may be sacrificed to attain the flexibility required for efficient catalysis, binding, or allosteric control. Partition-defective 6 (Par-6) regulates the Par polarity complex by transmitting a GTPase signal through the Cdc42/Rac interaction binding PSD-95/Dlg/ZO-1 (CRIB-PDZ) module that alters PDZ ligand binding. Allosteric activation of the PDZ is achieved by local rearrangement of the L164 and K165 side chains to stabilize the interdomain CRIB:PDZ interface and reposition a conserved element of the ligand binding pocket. However, microsecond to millisecond dynamics measurements revealed that L164/K165 exchange requires a larger rearrangement than expected. The margin of thermodynamic stability for the PDZ domain is modest (3 kcal/mol) and further reduced by transient interactions with the disordered CRIB domain. Measurements of local structural stability revealed that tertiary contacts within the PDZ are disrupted by a partial unfolding transition that enables interconversion of the L/K switch. The unexpected participation of partial PDZ unfolding in the allosteric mechanism of Par-6 suggests that native-state unfolding may be essential for the function of other marginally stable proteins.