The majority of the proteins encoded in the genomes of eukaryotes contain more than one domain. Reasons for high prevalence of multi-domain proteins in various organisms have been attributed to higher stability and functional and folding advantages over single-domain proteins. Despite these advantages, many proteins are composed of only one domain while their homologous domains are part of multi-domain proteins. In the study presented here, differences in the properties of protein domains in single-domain and multi-domain systems and their influence on functions are discussed. We studied 20 pairs of identical protein domains, which were crystallized in two forms (a) tethered to other proteins domains and (b) tethered to fewer protein domains than (a) or not tethered to any protein domain. Results suggest that tethering of domains in multi-domain proteins influences the structural, dynamic and energetic properties of the constituent protein domains. 50% of the protein domain pairs show significant structural deviations while 90% of the protein domain pairs show differences in dynamics and 12% of the residues show differences in the energetics. To gain further insights on the influence of tethering on the function of the domains, 4 pairs of homologous protein domains, where one of them is a full-length single-domain protein and the other protein domain is a part of a multi-domain protein, were studied. Analyses showed that identical and structurally equivalent functional residues show differential dynamics in homologous protein domains, though comparable dynamics between in-silico generated chimera protein and multi-domain proteins were observed. From these observations, the differences observed in the functions of homologous proteins could be attributed to the presence of tethered domain. Overall, we conclude that tethered domains in multi-domain proteins not only provide stability or folding advantages but also influence pathways resulting in differences in function or regulatory properties.