AAA+ proteases are ATP-fueled machines that bind protein substrates via a degradation tag, unfold the molecule if necessary, and then translocate the polypeptide into a chamber for proteolysis. Tag recognition is normally viewed as a passive reaction. By contrast, for the AAA+ Lon protease, we show that degron tags are also regulatory elements that determine protease activity levels. Indeed, different tags fused to the same protein change degradation speeds and energetic efficiencies by 10-fold or more. Degron binding to multiple sites in the Lon hexamer appears to differentially stabilize specific enzyme conformations, including one with high protease and low ATPase activity, and results in positively cooperative degradation. These allosteric mechanisms allow Lon to operate in either a fast or slow proteolysis mode, according to specific physiological needs, and may help maximize degradation of misfolded proteins following stress-induced denaturation.