The DegP protease-chaperone operates within the periplasm of Gram-negative bacteria, where it assists in the regulation of protein homeostasis, promotes virulence, and is essential to survival under stress. To carry out these tasks, DegP forms a network of preorganized apo oligomers that facilitate the capture of substrates within distributions of cage-like complexes which expand to encapsulate clients of various sizes. Although the architectures of DegP cage complexes are well understood, little is known about the structures, dynamics, and interactions of client proteins within DegP cages and the relationship between client structural dynamics and function. Here, we probe host-guest interactions within a 600 kDa DegP cage complex throughout the DegP activation cycle using a model α-helical client protein through a combination of hydrodynamics measurements, methyl-transverse relaxation optimized spectroscopy-based solution nuclear magnetic resonance studies, and proteolytic activity assays. We find that in the presence of the client, DegP cages assemble cooperatively with few intermediates. Our data further show that the N-terminal half of the bound client, which projects into the interior of the cages, is predominantly unfolded and flexible, and exchanges between multiple conformational states over a wide range of time scales. Finally, we show that a concerted structural transition of the protease domains of DegP occurs upon client engagement, leading to activation. Together, our findings support a model of DegP as a highly cooperative and dynamic molecular machine that stabilizes unfolded states of clients, primarily via interactions with their C-termini, giving rise to efficient cleavage.