Camelid nanobodies (Nbs) raised against the outward-facing conformer of a double-Trp mutant of the lactose permease of Escherichia coli (LacY) stabilize the permease in outward-facing conformations. Isothermal titration calorimetry is applied herein to dissect the binding thermodynamics of two Nbs, one that markedly improves access to the sugar-binding site and another that dramatically increases the affinity for galactoside. The findings presented here show that both enthalpy and entropy contribute favorably to binding of the Nbs to wild-type (WT) LacY and that binding of Nb to double-Trp mutant G46W/G262W is driven by a greater enthalpy at an entropic penalty. Thermodynamic analyses support the interpretation that WT LacY is stabilized in outward-facing conformations like the double-Trp mutant with closure of the water-filled cytoplasmic cavity through conformational selection. The LacY conformational transition required for ligand binding is reflected by a favorable entropy increase. Molecular dynamics simulations further suggest that the entropy increase likely stems from release of immobilized water molecules primarily from the cytoplasmic cavity upon closure.