Structural maintenance of chromosome (SMC) proteins play a central role in higher-order chromosome structure in all kingdoms of life. SMC proteins consist of a long coiled-coil domain that joins an ATP binding cassette (ABC) ATPase domain on one side and a dimerization domain on the other side. SMC proteins require ATP binding or hydrolysis to promote cohesion and condensation, which is suggested to proceed via formation of SMC rings or assemblies. To learn more about the role of ATP in the architecture of SMC proteins, we report crystal structures of nucleotide-free and ATP bound P. furiosus SMC ATPase domains. ATP dimerizes two SMC ATPase domains by binding to opposing Walker A and signature motifs, indicating that ATP binding can directly assemble SMC proteins. DNA stimulates ATP hydrolysis in the engaged SMC ABC domains, suggesting that ATP hydrolysis can be allosterically regulated. Structural and mutagenesis data identify an SMC protein conserved-arginine finger that is required for DNA stimulation of the ATPase activity and directly connects a putative DNA interaction site to ATP. Our results suggest that stimulation of the SMC ATPase activity may be a specific feature to regulate the ATP-driven assembly and disassembly of SMC proteins.