Intrinsically disordered proteins (IDPs) present a functional paradox because they lack stable tertiary structure, but nonetheless play a central role in signaling, utilizing a process known as allostery. Historically, allostery in structured proteins has been interpreted in terms of propagated structural changes that are induced by effector binding. Thus, it is not clear how IDPs, lacking such well-defined structures, can allosterically affect function. Here, we show a mechanism by which an IDP can allosterically control function by simultaneously tuning transcriptional activation and repression, using a novel strategy that relies on the principle of ‘energetic frustration’. We demonstrate that human glucocorticoid receptor tunes this signaling in vivo by producing translational isoforms differing only in the length of the disordered region, which modulates the degree of frustration. We expect this frustration-based model of allostery will prove to be generally important in explaining signaling in other IDPs.