Motor-based transport mechanisms are critical for a wide range of eukaryotic cell functions, including the transport of vesicle cargos over long distances. Our understanding of the factors that control and regulate motors when bound to a lipid substrate is however incomplete. We used microtubule gliding assays on a lipid bilayer substrate to investigate the role of membrane diffusion in kinesin-1 on/off binding kinetics and thereby transport velocity. Fluorescence imaging experiments demonstrate motor clustering on single microtubules due to membrane diffusion in the absence of ATP, followed by rapid ATP-induced dissociation during gliding. Our experimental data combined with analytical modeling show that the on/off binding kinetics of the motors are impacted by diffusion and, as a consequence, both the effective binding and unbinding rates for motors are much lower than the expected bare rates. Our results suggest that motor diffusion in the membrane can play a significant role in transport by impacting motor kinetics and can therefore function as a regulator of intracellular transport dynamics.