The complex between lipoprotein lipase (LPL) and its endothelial receptor (GPIHBP1) is responsible for the lipolytic processing of triglyceride-rich lipoproteins (TRLs) along the capillary lumen, a physiologic process that releases lipid nutrients for vital organs such as heart and skeletal muscle. LPL activity is regulated in a tissue-specific manner by endogenous inhibitors (angiopoietin-like [ANGPTL] proteins 3, 4, and 8), but the molecular mechanisms are incompletely understood. ANGPTL4 catalyzes the inactivation of LPL monomers by triggering the irreversible unfolding of LPL’s α/β-hydrolase domain. Here, we show that this unfolding is initiated by the binding of ANGPTL4 to sequences near LPL’s catalytic site, including β2, β3–α3, and the lid. Using pulse-labeling hydrogen‒deuterium exchange mass spectrometry, we found that ANGPTL4 binding initiates conformational changes that are nucleated on β3–α3 and progress to β5 and β4–α4, ultimately leading to the irreversible unfolding of regions that form LPL’s catalytic pocket. LPL unfolding is context dependent and varies with the thermal stability of LPL’s α/β-hydrolase domain (T_m of 34.8 °C). GPIHBP1 binding dramatically increases LPL stability (T_m of 57.6 °C), while ANGPTL4 lowers the onset of LPL unfolding by ∼20 °C, both for LPL and LPL•GPIHBP1 complexes. These observations explain why the binding of GPIHBP1 to LPL retards the kinetics of ANGPTL4-mediated LPL inactivation at 37 °C but does not fully suppress inactivation. The allosteric mechanism by which ANGPTL4 catalyzes the irreversible unfolding and inactivation of LPL is an unprecedented pathway for regulating intravascular lipid metabolism.