Heat-shock proteins of 70 kDa (Hsp70s) are ubiquitous molecular chaperones that function in protein folding as well as other vital cellular processes. They bind and hydrolyze ATP in a nucleotide-binding domain (NBD) to control the binding and release of client polypeptides in a substrate-binding domain (SBD). However, the molecular mechanism for this allosteric action has remained unclear. Here, we develop and experimentally quantify a theoretical model for Hsp70 allostery based on equilibria among Hsp70 conformational states. We postulate that, when bound to ATP, Hsp70 is in equilibrium between a restraining state (R) that restricts ATP hydrolysis and binds peptides poorly, if at all, and a stimulating state (S) that hydrolyzes ATP relatively rapidly and has high intrinsic substrate affinity but rapid binding kinetics; after the hydrolysis to ADP, NBD and SBD disengage into an uncoupled state (U) that binds peptide substrates tightly, but now with slow kinetics of exchange.