The serine/threonine mammalian sterile 20-like kinase (MST1) is involved in promotion of caspase-dependent and independent apoptosis. Phosphorylation and oligomerization are required for its activation. The oligomerization domain, denoted as SARAH domain, forms an antiparallel coiled coil dimer, and it is important for both MST1 autophosphorylation and interactions with other proteins like the Rassf proteins containing also a SARAH domain. Here we show that the monomeric state of SARAH is thermodynamically unstable and that homodimerization is coupled with folding. Moreover, the influence of the inhibitory domain on SARAH stability and affinity is addressed. By investigating the thermal denaturation using differential scanning calorimetry and circular dichroism, we have found that the SARAH domain dissociates and unfolds cooperatively, without a stable intermediate monomeric state. Combining the data with information from isothermal titration calorimetry, a low thermodynamic stability of the monomeric species is obtained. Thus, it is proposed that the transition from MST1 SARAH homodimer to some specific heterodimer implies a non-native monomer intermediate. The inhibitory domain is found to be highly flexible and intrinsically unfolded, not only in isolation but also in the dimeric state of the inhibitory-SARAH construct. The existence of two caspase recognition motifs within the inhibitory domain suggests that its structural flexibility might be important for activation of MST1 during apoptosis. Moreover, the inhibitory domain increases the thermodynamic stability of the SARAH dimer and the homodimer affinity, while having almost no effect on the SARAH domain in the monomeric state. These results emphasize the importance of flexibility and binding-induced folding for specificity, affinity, and the capacity to switch from one state to another.