We analyzed the thermodynamics of a complex protein-protein binding interaction using the (engineered) Z(SPA-1) affibody and it's Z domain binding partner as a model. Free Z(SPA-1) exists in an equilibrium between a molten-globule-like (MG) state and a completely unfolded state, wheras a well-ordered structure is observed in the Z:Z(SPA-1) complex. The thermodynamics of the MG state unfolding equilibrium can be separated from the thermodynamics of binding and stabilization by combined analysis of isothermal titration calorimetry data and a separate van't Hoff analysis of thermal unfolding. We find that (i) the unfolding equilibrium of free Z(SPA-1) has only a small influence on effective binding affinity, that (ii) the Z:Z(SPA-1) interface is inconspicuous and structure-based energetics calculations suggest that it should be capable of supporting strong binding, but that (iii) the conformational stabilization of the MG state to a well-ordered structure in the Z:Z(SPA-1) complex is associated with a large change in conformational entropy that opposes binding.