The mechanochemical GTPase dynamin-related protein 1 (Drp1) catalyzes mitochondrial and peroxisomal fission, but the regulatory mechanisms remain ambiguous. Here we find that a conserved, intrinsically disordered, six-residue Short Linear Motif at the extreme Drp1 C-terminus, named CT-SLiM, constitutes a critical allosteric site that controls Drp1 structure and function in vitro and in vivo. Extension of the CT-SLiM by non-native residues, or its interaction with the protein partner GIPC-1, constrains Drp1 subunit conformational dynamics, alters self-assembly properties, and limits cooperative GTP hydrolysis, surprisingly leading to the fission of model membranes in vitro. In vivo, the involvement of the native CT-SLiM is critical for productive mitochondrial and peroxisomal fission, as both deletion and non-native extension of the CT-SLiM severely impair their progression. Thus, contrary to prevailing models, Drp1-catalyzed membrane fission relies on allosteric communication mediated by the CT-SLiM, deceleration of GTPase activity, and coupled changes in subunit architecture and assembly-disassembly dynamics.