P-glycoprotein (Pgp), the ATP-binding cassette (ABC) transporter, confers multidrug resistance to cancer cells by extruding cytotoxic natural product amphipathic drugs using the energy of ATP hydrolysis. Our studies are directed toward understanding the mechanism of action of Pgp and recent work deals with the assessment of interaction between substrate and ATP sites and elucidation of the catalytic cycle of ATP hydrolysis. The kinetic analyses of ATP hydrolysis by reconstituted purified Pgp suggest that ADP release is the rate-limiting step in the catalytic cycle and the substrates exert their effect by modulating ADP release. In addition, we provide evidence for two distinct roles for ATP hydrolysis in a single turnover of Pgp, one in the transport of drug and the other in effecting conformational changes so as to reset the transporter for the next catalytic cycle. Detailed kinetic measurements determined that both nucleotide-binding domains behave symmetrically and during individual hydrolysis events the ATP sites are recruited in a random manner. Furthermore, only one nucleotide site hydrolyzes ATP at any given time, causing (in this site) a conformational change that drastically decreases (>30-fold) the affinity of the second site for ATP-binding. Thus, the blocking of ATP-binding to the second site while the first one is in catalytic conformation appears to be the basis for the alternate catalytic cycle of ATP hydrolysis by Pgp, and this may be applicable as well to other ABC transporters linked with the development of multidrug resistance.