Voltage-gated Na+ (NaV) channels underlie the initiation and propagation of action potentials (APs). Rapid inactivation after NaV channel opening, known as open-state inactivation, plays a critical role in limiting the AP duration. However, NaV channel inactivation can also occur before opening, namely closed-state inactivation, to tune the cellular excitability. The voltage-sensing domain (VSD) within repeat IV (VSD-IV) of the pseudotetrameric NaV channel α-subunit is known to be a critical regulator of NaV channel inactivation. Yet, the two processes of open- and closed-state inactivation predominate at different voltage ranges and feature distinct kinetics. How inactivation occurs over these different ranges to give rise to the complexity of NaV channel dynamics is unclear. Past functional studies and recent cryo-electron microscopy structures, however, reveal significant inactivation regulation from other NaV channel components. In this Hypothesis paper, we propose that the VSD of NaV repeat III (VSD-III), together with VSD-IV, orchestrates the inactivation-state occupancy of NaV channels by modulating the affinity of the intracellular binding site of the IFMT motif on the III-IV linker. We review and outline substantial evidence that VSD-III activates in two distinct steps, with the intermediate and fully activated conformation regulating closed- and open-state inactivation state occupancy by altering the formation and affinity of the IFMT crevice. A role of VSD-III in determining inactivation-state occupancy and recovery from inactivation suggests a regulatory mechanism for the state-dependent block by small-molecule anti-arrhythmic and anesthetic therapies.