Background and Purpose: The classical theory of receptor action has been used for decades as a powerful tool to estimate molecular determinants of ligand-induced receptor activation (i.e. affinity and efficacy) from experimentally observable biological responses. However, it is also a well-recognized fact that the receptor-binding and activation mechanisms, and the parameters thereof, described in the classical theory contradict with the modern view of receptor activation based on allosteric principles. Experimental Approach: We used mathematical analysis, along with some numerical simulations, to answer the key question as to what extent the classical theory is compatible -if at all- with the modern understanding of receptor activation. Key Results: Here, we showed conclusively that 1) receptor activation equations based on allosteric principles contain the logic of the classical theory in disguise, and therefore, 2) estimates of “intrinsic efficacy” () obtained by means of classical techniques (i.e. null methods or fitting the operational model to concentration-response data) are equivalent to the allosteric coupling factors that represent the molecular efficacy of ligands. Conclusion and Implications: Thus, we conclude that despite the right criticisms it has received so far, the classical theory may continue to be useful in estimating ligand efficacy from experimental data, if used properly. Here, we also provide rigorous criteria for the proper use of the theory. These findings not only have implications on ligand classification, but also resolve some long lasting discussions in the field of bias agonism in GPCR, which requires reasonable estimates of relative ligand efficacies at different signalling pathways.