The 97-kDa valosin-containing protein (p97-VCP or VCP), a hexameric AAA ATPase, plays an important role in diverse cell activities, including ubiquitin-proteasome mediated protein degradation. In this report, we studied dissociation-reassembly kinetics to analyze the structure-function relationship in VCP. Urea-dissociated VCP can reassemble by itself, but addition of ATP, ADP, or ATP-gamma S accelerates the reassembly. Mutation in the ATP-binding site of D1, but not D2, domain abolishes the ATP acceleration effect and further delays the reassembly. Using hybrid hexamers of the wild type and ATP-binding site mutant, we show that hexameric structure and proper communication among the subunits are required for the ATPase activity and ubiquitin-proteasome mediated degradation. Thus, ATP-binding site in D1 plays a major role in VCP hexamerization, of which proper inter-subunit interaction is essential for the activities.