The beta sliding clamp encircles DNA and enables processive replication of the Escherichia coli genome by DNA polymerase III holoenzyme. The clamp loader, gamma complex, assembles beta around DNA in an ATP-fueled reaction. Previous studies have shown that gamma complex opens the beta ring and also interacts with DNA on binding ATP. Here, a rapid kinetic analysis demonstrates that gamma complex hydrolyzes two ATP molecules sequentially when placing beta around DNA. The first ATP is hydrolyzed fast, at 25-30 s(-1), while the second ATP hydrolysis is limited to the steady-state rate of 2 s(-1). This step-wise reaction depends on both primed DNA and beta. DNA alone promotes rapid hydrolysis of two ATP molecules, while beta alone permits hydrolysis of only one ATP. These results suggest that beta inserts a slow step between the two ATP hydrolysis events in clamp assembly, during which the clamp loader may perform work on the clamp. Moreover, one ATP hydrolysis is sufficient for release of beta from the gamma complex. This implies that DNA-dependent hydrolysis of the other ATP is coupled to a separate function, perhaps involving work on DNA. A model is presented in which sequential ATP hydrolysis drives distinct events in the clamp-assembly pathway. We also discuss underlying principles of this step-wise mechanism that may apply to the workings of other ATP-fueled biological machines.