The integral membrane protein complex between phospholamban (PLN) and sarcoplasmic reticulum Ca(2+)-ATPase (SERCA) regulates cardiac contractility. In the unphosphorylated form, PLN binds SERCA and inhibits Ca(2+) flux. Upon phosphorylation of PLN at Ser16, the inhibitory effect is reversed. Although structural details on both proteins are emerging from X-ray crystallography, cryo-electron microscopy, and NMR studies, the molecular mechanisms of their interactions and regulatory process are still lacking. It has been speculated that SERCA regulation depends on PLN structural transitions (order to disorder, i.e., folding/unfolding). Here, we investigated PLN conformational changes upon chemical unfolding by a combination of electron paramagnetic resonance and NMR spectroscopies, revealing that the conformational transitions involve mostly the cytoplasmic regions, with two concomitant phenomena: (1) membrane binding and folding of the amphipathic domain Ia and (2) folding/unfolding of the juxtamembrane domain Ib of PLN. Analysis of phosphorylated and unphosphorylated PLN with two phosphomimetic mutants of PLN (S16E and S16D) shows that the population of an unfolded state in domains Ia and Ib (T' state) is linearly correlated to the extent of SERCA inhibition measured by activity assays. Inhibition of SERCA is carried out by the folded ground state (T state) of the protein (PLN), while the relief of inhibition involves promotion of PLN to excited conformational states (Ser16 phosphorylated PLN). We propose that PLN population shifts (folding/unfolding) are a key regulatory mechanism for SERCA.