We use a novel normal mode analysis of an elastic network model drawn from configurations generated during microsecond all-atom molecular dynamics simulations to analyze the mechanism of auto-inhibition of AMP-activated protein kinase (AMPK). A recent X-ray and mutagenesis experiment (Chen, et al Nature 2009, 459, 1146) of the AMPK homolog S. Pombe sucrose non-fermenting 1 (SNF1) has proposed a new conformational switch model involving the movement of the kinase domain (KD) between an inactive unphosphorylated open state and an active or semi-active phosphorylated closed state, mediated by the autoinhibitory domain (AID), and a similar mutagenesis study showed that rat AMPK has the same auto-inhibition mechanism. However, there is no direct dynamical evidence to support this model and it is not clear whether other functionally important local structural components are equally inhibited. By using the same SNF1 KD-AID fragment as that used in experiment, we show that AID inhibits the catalytic function by restraining the KD into an unproductive open conformation, thereby limiting local structural rearrangements, while mutations that disrupt the interactions between the KD and AID allow for both the local structural rearrangement and global interlobe conformational transition. Our calculations further show that the AID also greatly impacts the structuring and mobility of the activation loop.