Recently, a solid-state NMR study revealed that scorpion toxin binding leads to conformational changes in the selectivity filter of potassium channels. The exact nature of the conformational changes, however, remained elusive. We carried out all-atom molecular dynamics simulations that enabled us to cover the complete pathway of toxin approach and binding, and we validated our simulation results by using solid-state NMR data and electrophysiological measurements. Our structural model revealed a mechanism of cooperative toxin-induced conformational changes that accounts both for the signal changes observed in solid-state NMR and for the tight interaction between KcsA-Kv1.3 and Kaliotoxin. We show that this mechanism is structurally and functionally closely related to recovery from C-type inactivation. Furthermore, our simulations indicate heterogeneity in the binding modes of Kaliotoxin, which might serve to enhance its affinity for KcsA-Kv1.3 further by entropic stabilization.