Cytochrome P450 3A4 (CYP3A4) is a key enzyme responsible for the metabolism of 50% of all orally administered drugs which exhibit an intriguing kinetic behavior typified by a sigmoidal dependence of the reaction velocity on the substrate concentration. There is evidence for the binding of two substrates in the active site of the enzyme, but the mechanism of this cooperative binding is unclear. Diazepam is such a drug that undergoes metabolism by CYP3A4 with sigmoidal dependence. Metabolism is initiated by hydrogen atom abstraction from the drug. To understand the factors that determine the cooperative binding and the juxtaposition of the C-H bond undergoing abstraction, we carried out molecular dynamics simulations for two enzymatic conformers and examined the differences between the substrate-free and the bound enzymes, with one and two diazepam molecules. Our results indicate that the effector substrate interacts both with the active substrate and with the enzyme, and that this interaction results in side chain reorientation with relatively minor long-range effects. In accord with experiment, we find that F304, in the interface between the active and effector binding sites, is a key residue in the mechanism of cooperative binding. The addition of the effector substrate stabilizes F304 and its environment, especially F213, and induces a favorable orientation of the active substrate, leading to a short distance between the targeted hydrogen for abstraction and the active species of the enzyme. In addition, in one conformer of the enzyme, residue R212 may strongly interact with F304 and counteract the effector's impact on the enzyme.