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Substrate‐binding proteins (SBPs) are used by organisms from the three domains of life for transport and signalling. SBPs are composed of two domains that collectively trap ligands with high affinity and selectivity. To explore the role of the domains and the integrity of the hinge region between them in the function and conformation of SBPs, here, we describe the ligand binding, conformational stability and folding kinetics of the Lysine Arginine Ornithine (LAO) binding protein from Salmonella thiphimurium and constructs corresponding to its two independent domains. LAO is a class II SBP formed by a continuous and a discontinuous domain. Contrary to the expected behaviour based on their connectivity, the discontinuous domain shows a stable native‐like structure that binds l‐arginine with moderate affinity, whereas the continuous domain is barely stable and shows no detectable ligand binding. Regarding folding kinetics, studies of the entire protein revealed the presence of at least two intermediates. While the unfolding and refolding of the continuous domain exhibited only a single intermediate and simpler and faster kinetics than LAO, the folding mechanism of the discontinuous domain was complex and involved multiple intermediates. These findings suggest that in the complete protein the continuous domain nucleates folding and that its presence funnels the folding of the discontinuous domain avoiding nonproductive interactions. The strong dependence of the function, stability and folding pathway of the lobes on their covalent association is most likely the result of the coevolution of both domains as a single unit. [ABSTRACT FROM AUTHOR]