Freeze-trapping x-ray crystallography, nuclear magnetic resonance, and computational techniques reveal the distribution of states and their interconversion rates along the reaction pathway of a bacterial homodimeric enzyme, fluoroacetate dehalogenase (FAcD). The crystal structure of apo-FAcD exhibits asymmetry around the dimer interface and cap domain, priming one protomer for substrate binding. This asymmetry is dynamically averaged through conformational exchange on a millisecond time scale. During catalysis, the protomer conformational exchange rate becomes enhanced, the empty protomer exhibits increased local disorder, and water egresses. Computational studies identify allosteric pathways between protomers. Water release and enhanced dynamics associated with catalysis compensate for entropic losses from substrate binding while facilitating sampling of the transition state. The studies provide insights into how substrate-coupled allosteric modulation of structure and dynamics facilitates catalysis in a homodimeric enzyme.