Transketolase (TK) cofactor binding has been studied extensively over many years, yet certain mysteries remain, such as a lack of consensus on the cooperativity of thiamine pyrophosphate (TPP) binding into the two active sites, in the presence and absence of the divalent cation, Mg2+. Using a novel fluorescence-based assay, we determined directly the dissociation constants and cooperativity of TPP binding and provide the first comprehensive study over a broad range of cofactor concentrations. We confirmed the high-affinity dissociation constants and revealed a dependence of both the affinity and cooperativity of binding on [Mg2+], which explained the previous lack of consensus. A second, discrete and previously uncharacterised low-affinity TPP binding-site was also observed, and hence indicated the existence of two forms of TK with high- (TKhigh) and low-affinity (TKlow). The relative proportions of each dimer were independent of the monomer-dimer transition, as probed by analytical ultracentrifugation at various [TK]. Mass spectrometry revealed that chemical oxidation of TKlow led to the formation of TKhigh, which was 22-fold more active than TKlow. Finally, we propose a two-species model of transketolase activation that describes the interconversions between apo-/holo-TKhigh and TKlow, and the potential to significantly improve biocatalytic activity by populating only the most active form.