Heterotropic interaction refers to the phenomenon where the binding of a ligand to one site on a protein affects the binding properties of a different ligand at a different site on the same protein. This type of interaction plays a crucial role in allosteric regulation, where the binding of an effector molecule can either enhance or inhibit the activity of an enzyme or receptor. It underscores the cooperative nature of protein-ligand interactions and how changes in one binding site can influence overall protein function.