Heat shock protein 90 (Hsp90), one of the most abundant chaperones in eukaryotes, participates in folding and stabilization of signal-transducing molecules including steroid hormone receptors and protein kinases. The amino terminus of Hsp90 contains a non-conventional nucleotide-binding site, related to the ATP-binding motif of bacterial DNA gyrase. The anti-tumor agents geldanamycin and radicicol bind specifically at this site and induce destabilization of Hsp90-dependent client proteins. We recently demonstrated that the gyrase inhibitor novobiocin also interacts with Hsp90, altering the affinity of the chaperone for geldanamycin and radicicol and causing in vitro and in vivo depletion of key regulatory Hsp90-dependent kinases including v-Src, Raf-1, and p185(ErbB2). In the present study we used deletion/mutation analysis to identify the site of interaction of novobiocin with Hsp90, and we demonstrate that the novobiocin-binding site resides in the carboxyl terminus of the chaperone. Surprisingly, this motif also recognizes ATP, and ATP and novobiocin efficiently compete with each other for binding to this region of Hsp90. Novobiocin interferes with association of the co-chaperones Hsc70 and p23 with Hsp90. These results identify a second site on Hsp90 where the binding of small molecule inhibitors can significantly impact the function of this chaperone, and they support the hypothesis that both amino- and carboxyl-terminal domains of Hsp90 interact to modulate chaperone activity.