F-1-ATPase is an ATP-driven rotary motor enzyme. The beta subunit changes its conformation from an open to a closed form upon ATP binding. The motion in the beta subunit is regarded as a major driving force for rotation of the central stalk. In this Article, we explore the conformational change of the beta subunit using all-atom free energy simulations with explicit solvent and propose a detailed mechanism for the conformational change. The beta subunit conformational change is accomplished roughly in two characteristic steps: changing of the hydrogen-bond network around ATP and the dynamic movement of the C-terminal domain via sliding of the B-helix. The details of the former step agree well with experimental data. In the latter step, sliding of the B-helix enhances the hydrophobic stabilization due to the exclusion of water molecules from the interface and improved packing in the hydrophobic core. This step contributes to a decrease in free energy, leading to the generation of torque in the F-1-ATPase upon ATP binding.