Despite the importance of kinases' catalytic activity regulation in cell signaling, detailed mechanisms underlying their activity regulation are poorly understood. Herein, using insulin-like growth factor 1 receptor kinase (IGF-1RK) as a model, the mechanisms of kinase regulation by its activation loop (A-loop) phosphorylation were investigated through molecular dynamics (MD) and alchemical free energy simulations. Analyses of the simulation results and free energy landscapes determined for the entire catalytic cycle of the kinase revealed that A-loop phosphorylation affects each step in the IGF-1RK catalytic cycle, including conformational change, substrate binding/product release and catalytic phosphoryl transfer. Specifically, the conformational equilibrium of the kinase is shifted by 13.2 kcal mol⁻¹ to favor the active conformation after A-loop phosphorylation, which increases substrate binding affinity of the activated kinase. This free energy shift is achieved primarily via destabilization of the inactive conformation. The free energy of the catalytic reaction is also changed by 3.3 kcal mol⁻¹ after the phosphorylation and in the end, facilitates product release. Analyses of MD simulations showed that A-loop phosphorylation produces these energetic effects by perturbing the side chain interactions around each A-loop tyrosine. These interaction changes are propagated to the remainder of the kinase to modify the orientations and dynamics of the αC-helix and A-loop, and together yield the observed free energy changes. Since many protein kinases share similar interactions identified in this work, the mechanisms of kinase allostery and catalysis unraveled here can be applicable to them.