Cellular retinoic acid-binding protein 2 (CRABP2) delivers all-trans retinoic acid (atRA) to retinoic acid receptors (RARs), allowing for the activation of specific gene transcription. The structural similarities between free and atRA-bound CRABP2 raise the questions of how atRA binding occurs and how the atRA:CRABP2 complex is recognized by downstream binding partners. Thus, to gain insights into these questions, we conducted a detailed atRA-CRABP2 interaction study using nuclear magnetic resonance spectroscopy. The data showed that free CRABP2 displays widespread intermediate-time scale dynamics that is effectively suppressed upon atRA binding. This effect is mirrored by the fast-time scale dynamics of CRABP2. Unexpectedly, CRABP2 rigidification in response to atRA binding leads to the stabilization of a homodimerization interface, which encompasses residues located on helix α2 and the βC-βD loop as well as residues on strands βI-βA and the βH-βI loop. Critically, this rigidification also affects CRABP2's nuclear localization signal and RAR-binding motif, suggesting that the loss of conformational entropy upon atRA binding may be the key for the diverse cellular functions of CRABP2.