Allostery is a regulatory phenomenon whereby ligand binding to one site influences the binding of the same or a different ligand to another site on a macromolecule. The physical origins of allosteric regulation remain under intense investigation. In general terms, ligand-induced structural changes, perturbations of residue-specific dynamics, and surrounding solvent molecules all potentially contribute to the global energetics of allostery. While the role of solvent is generally well understood in regulatory events associated with major protein structural rearrangements, the degree to which protein dynamics impact solvent degrees of freedom is unclear, particularly in cases of dynamically driven allostery. With the aid of new crystal structures, extensive calorimetric and residue-specific dynamics studies over a range of time scales and temperatures, we dissect for the first time the relative degree to which changes in solvent entropy and residue-specific dynamics impact dynamically driven, allosteric inhibition of DNA binding by Zn in the zinc efflux repressor, CzrA (chromosomal zinc-regulated repressor). We show that non-native residue-specific dynamics in allosterically impaired CzrA mutants are accompanied by significant perturbations in solvent entropy that cannot be predicted from crystal structures. We conclude that functional dynamics are not necessarily restricted to protein residues but involve surface water molecules that may be responding to ligand (Zn)-mediated perturbations in protein internal motions that define the conformational ensemble, rather than major structural rearrangements.