SKD1/VPS4B belongs to the adenosine triphosphatases associated with diverse cellular activities (AAA) family and regulates multivesicular body (MVB) biogenesis. SKD1 changes its oligomeric state during the ATPase cycle and subsequently releases endosomal sorting complex required for transport (ESCRT) complexes from endosomes during the formation of MVBs. In this study, we describe domain motions in monomeric SKD1 on ATP and ADP binding. Nucleotides bind between the alpha/beta and the alpha-helical domains of SKD1, inducing a approximately 20 degrees domain rotation and closure of the binding site, which are similar to the changes observed in the AAA+ ATPase, HslU. Gel filtration and small-angle X-ray scattering experiments showed that the ATP-bound form of SKD1 oligomerizes in solution, whereas ADP-bound and apo forms of SKD1 exist as monomers, even though the conformations of the ADP- and ATP-bound forms are nearly identical. Nucleotide-bound SKD1 structures are compatible with a hexameric ring arrangement reminiscent of the AAA ATPase p97 D1 ring. In the hexameric ring model of SKD1, Arg290 from a neighboring molecule binds to the gamma-phosphate of ATP, which promotes oligomerization of the ATP-bound form. ATP hydrolysis would eliminate this interaction and subsequent nucleotide release causes the domains to rotate, which together lead to the disassembly of the SKD1 oligomer.