Proteins do not exist in isolation within cells, but rather reside in a highly crowded and dynamic environment. Understanding how this milieu influences protein structure and function is a fundamental challenge in biophysics. Here, we use extensive atomistic molecular dynamics simulations and free energy calculations to investigate how the naturally crowded environment within a cell affects the structure, internal dynamics, and function of a prototypical protein, RNase H. Our simulations demonstrate that the crowded environment significantly compacts the protein structure, leading to a more ordered and rigid protein conformation. This compaction manifests in increased backbone and side-chain order parameters and reduced internal protein fluctuations. Furthermore, the reduced dynamics of RNase H within the crowded environment significantly alter its conformational landscape, affecting the populations and free energy differences of different functional sub-states. These findings provide atomistic insights into the influence of cellular crowding on protein structure and dynamics, underscoring the importance of considering the cellular milieu when studying protein function.