In a living cell, protein function is regulated in several ways, including post-translational modifications (PTMs), protein-protein interaction, or by the global environment (e.g. crowding or phase separation). While site-specific PTMs act very locally on the protein, specific protein interactions typically affect larger (sub-)domains, and global changes affect the whole protein non-specifically. Herein, we directly observe protein regulation under three different degrees of localization, and present the effects on the Hsp90 chaperone system at the levels of conformational steady states, kinetics and protein function. Interestingly using single-molecule FRET, we find that similar functional and conformational steady states are caused by completely different underlying kinetics. We disentangle specific and non-specific effects that control Hsp90’s ATPase function, which has remained a puzzle up to now. Lastly, we introduce a new mechanistic concept: functional stimulation through conformational confinement. Our results demonstrate how cellular protein regulation works by fine-tuning the conformational state space of proteins.