Intrinsically disordered proteins are abundant in the eukaryotic proteome, and they are implicated in a range of different diseases. However, there is a paucity of experimental data on molecular details of the coupled binding and folding of such proteins. Two interacting and relatively well studied disordered protein domains are the activation domain from the p160 transcriptional co-activator ACTR and the nuclear co-activator binding domain (NCBD) of CREB binding protein. We have analyzed the transition state for their coupled binding and folding by protein engineering and kinetic experiments (Φ-value analysis) and found that it involves weak native interactions between the N-terminal helices of ACTR and NCBD, but is otherwise "disordered-like". Most native hydrophobic interactions in the interface between the two domains form later, after the rate-limiting barrier for association. Linear free energy relationships suggest a cooperative formation of native interactions, reminiscent of the nucleation-condensation mechanism in protein folding.