The lipase LipA from Pseudomonas aeruginosa is a multifunctional enzyme that plays an important role as a virulence factor in bacterial infections, but is also useful for a variety of biotechnological applications. This enzyme is secreted via the type II secretion system (T2SS) and strictly depends on its cognate membrane-anchored foldase LipH for maturation. While structural studies have elucidated the architecture of the assembled LipH:lipase complex, how the full-length, membrane-tethered foldase dynamically recognizes, folds, and releases its client has remained barely understood. Here, we combine all-atom molecular dynamics simulations, small-angle X-ray scattering (SAXS), hydrogen/deuterium exchange mass spectrometry, and reconstitution into membrane mimetics to investigate the conformational dynamics and function of the full-length LipH in a membrane context. Simulations reveal that the membrane-anchored LipH is highly dynamic, sampling a broad ensemble of conformations, in which the chaperoning cavity is transiently closed or occluded by both the proximal membrane and the linker polypeptide, which is further confirmed by SAXS analysis. Despite the steric hindrance, the full-length LipH reconstituted into membrane mimetics efficiently activates LipA, though it displays substantially reduced affinity for the client. We propose that the negatively charged membrane promotes release of the folded client, enabling multiple chaperoning cycles. Hydrogen/deuterium exchange analysis reveals that the MD2 domain of LipH in engaged in stable interactions with the lipase, whereas MD1 contacts are transient. Consistently, LipH readily captures N-terminal fragments of LipA, indicating that initial recognition relies on local interactions via the MD2 domain. Together, our results show how membrane coupling and intrinsic conformational plasticity modulate the function of the steric chaperone, and suggest that the membrane-anchored LipH balances capture, folding, and release of the client LipA to enable its efficient maturation and secretion.