Whereas previously we have successfully utilized the folding funnels concept to rationalize binding mechanisms (Ma B, Kumar S, Tsai CJ, Nussinov R, 1999, Protein Eng 12:713–720) and to describe binding (Tsai CJ, Kumar S, Ma B, Nussinov R, 1999, Protein Sci 8:1181–1190), here we further extend the concept of folding funnels, illustrating its utility in explaining enzyme pathways, multimolecular associations, and allostery. This extension is based on the recognition that funnels are not stationary; rather, they are dynamic, depending on the physical or binding conditions (Tsai CJ, Ma B, Nussinov R, 1999, Proc Natl Acad Sci USA 96:9970–9972). Different binding states change the surrounding environment of proteins. The changed environment is in turn expressed in shifted energy landscapes, with different shapes and distributions of populations of conformers. Hence, the function of a protein and its properties are not only decided by the static folded three-dimensional structure; they are determined by the distribution of its conformational substates, and in particular, by the redistributions of the populations under different environments. That is, protein function derives from its dynamic energy landscape, caused by changes in its surroundings.