Intrinsically disordered proteins play important roles in cell signalling, transcription, translation and cell cycle regulation(1.2). Although they lack stable tertiary structure, many intrinsically disordered proteins undergo disorder-to-order transitions upon binding to partners(3,4). Similarly, several folded proteins use regulated order-to-disorder transitions to mediate biological function(5,6). In principle, the function of intrinsically disordered proteins may be controlled by post-translational modifications that lead to structural changes such as folding, although this has not been observed. Here we show that multisite phosphorylation induces folding of the intrinsically disordered 4E-BP2, the major neural isoform of the family of three mammalian proteins that bind eIF4E and suppress cap-dependent translation initiation. In its non-phosphorylated state, 4E-BP2 interacts tightly with eIF4E using both a canonical YXXXXL Phi motif (starting at Y54) that undergoes a disorder-to-helix transition upon binding and a dynamic secondary binding site(7-11). We demonstrate that phosphorylation at T37 and T46 induces folding of residues P18-R62 of 4E-BP2 into a four-stranded beta-domain that sequesters the helical YXXXXL Phi motif into a partly buried beta-strand, blocking its accessibility to eIF4E. The folded state of pT37pT46 4E-BP2 is wealdy stable, decreasing affinity by 100-fold and leading to an order-to-disorder transition upon binding to eIF4E, whereas fully phosphorylated 4E-BP2 is more stable, decreasing affinity by a factor of approximately 4,000. These results highlight stabilization of a phosphorylation-induced fold as the essential mechanism for phospho-regulation of the 4E-BP:eIF4E interaction and exemplify a new mode of biological regulation mediated by intrinsically disordered proteins.