Peptides are promising therapeutic agents for various biological targets due to their high efficacy and low toxicity, and the design of peptide ligands with high binding affinity to the target of interest is of utmost importance in peptide‐based drug design. Introducing a conformational constraint to a flexible peptide ligand using a side‐chain lactam‐bridge is a convenient and efficient method to improve its binding affinity to the target. However, in general, such a small structural modification to a flexible ligand made with the intent of lowering the configurational entropic penalty for binding may have unintended consequences in different components of the binding enthalpy and entropy, including the configurational entropy component, which are still not clearly understood. Toward probing this, we examine different components of the binding enthalpy and entropy as well as the underlying structure and dynamics, for a side‐chain lactam‐bridged peptide inhibitor and its flexible analog forming complexes with vascular endothelial growth factor (VEGF), using all‐atom molecular dynamics simulations. It is found that introducing a side‐chain lactam‐bridge constraint into the flexible peptide analog led to a gain in configurational entropy change but losses in solvation entropy, solute internal energy, and solvation energy changes upon binding, pinpointing the opportunities and challenges in drug design. The present study features an interplay between configurational and solvation entropy changes, as well as the one between binding enthalpy and entropy, in ligand‐target binding upon imposing a conformational constraint into a flexible ligand.