The intrinsically disordered transactivation domains of HIF-1α and CITED2 compete for binding of the TAZ1 domain of the CREB-binding protein by a unidirectional allosteric mechanism involving direct competition for shared binding sites, ternary complex formation, and TAZ1 conformational changes. To gain insight into the mechanism by which CITED2 displaces HIF-1α from TAZ1, we used nuclear magnetic resonance spin relaxation methods to obtain an atomic-level description of the picosecond to nanosecond backbone dynamics that contribute to TAZ1 binding and competition. We show that HIF-1α and CITED2 adopt different dynamics in their complexes with TAZ1, with flexibility observed for HIF-1α in regions that would maintain accessibility for CITED2 to bind to TAZ1 and facilitate subsequent HIF-1α dissociation. In contrast, critical regions of CITED2 adopt a rigid structure in its complex with TAZ1, minimizing the ability of HIF-1α to compete for binding. We also find that TAZ1, previously thought to be a rigid scaffold for binding of disordered protein ligands, displays altered backbone dynamics in its various bound states. TAZ1 is more rigid in its CITED2-bound state than in its free state or in complex with HIF-1α, with increased rigidity observed not only in the CITED2 binding site but also in regions of TAZ1 that undergo conformational changes between the HIF-1α- and CITED2-bound structures. Taken together, these data suggest that backbone dynamics in TAZ1, as well as in the HIF-1α and CITED2 ligands, play a role in modulating the occupancy of TAZ1 and highlight the importance of characterizing both binding partners in molecular interactions.