Morphological changes in lipid membranes are hallmarks of a number of cellular processes like sorting, transport, etc. The dense crowding of the membrane environment with proteins and receptors has motivated many thorough academic investigations into the effects of macromolecular crowding on membrane surfaces. A number of recent studies have indicated that membrane reshaping could be driven by steric pressure between proteins co-localized on membrane domains. While these studies provide conclusive evidence for the membrane bending process, a detailed physical and mechanistic basis for this phenomenon is lacking. We provide a thermodynamic picture for this phenomenon through Isothermal Titration Calorimetry (ITC), Differential Scanning Calorimetry (DSC) and fluorescence microscopy using Ni-Nitrilotriacetic (NTA) acid and His-Tag interaction as a model system. Using ITC, we observe almost an order of magnitude increase in binding affinity for NTA-functionalized liposomes that display gel-fluid phase coexistence, as opposed to homogenous fluid compositions. This elevated affinity could be eliminated by thermal phase transition from gel-fluid to fluid, highlighting the importance of phase separation in modulating the strength of this binding interaction. DSC revealed that protein binding modulates the long-range lipid order substantially. In conjunction with the complicated nature of the binding isotherm, the DSC results indicate that the protein-binding event is coupled to a secondary exothermic process, presumably due to membrane deformation. Further ITC and fluorescence microscopy experiments reveal that the formation of membrane tubules upon protein binding is sensitive to membrane composition, phase separation and free energy of protein binding. Taken together with a predictive theoretical model that is currently under development, we believe that these results significantly advance our current understanding of the thermodynamics of membrane bending by protein crowding.