It is known that inhibition of histone deacetylases (HDACs) leads to acetylation of the abundant protein chaperone hsp90. In a recent study, we have shown that knockdown of HDAC6 by a specific small interfering RNA leads to hyperacetylation of hsp90 and that the glucocorticoid receptor (GR), an established hsp90 "client" protein, is defective in ligand binding, nuclear translocation, and gene activation in HDAC6-deficient cells (Kovacs, J. J., Murphy, P. J. M., Gaillard, S., Zhao, X., Wu, J-T., Nicchitta, C. V., Yoshida, M., Toft, D. O., Pratt, W. B., and Yao, T-P. (2005) Mol. Cell 18, 601-607). Using human embryonic kidney wild-type and HDAC6 (small interfering RNA) knockdown cells transiently expressing the mouse GR, we show here that the intrinsic properties of the receptor protein itself are not affected by HDAC6 knockdown, but the knockdown cytosol has a markedly decreased ability to assemble stable GR.hsp90 heterocomplexes and generate stable steroid binding activity under cell-free conditions. HDAC6 knockdown cytosol has the same ability to carry out dynamic GR.hsp90 heterocomplex assembly as wild-type cytosol. Addition of purified hsp90 to HDAC6 knockdown cytosol restores stable GR.hsp90 heterocomplex assembly to the level of wild-type cytosol. hsp90 from HDAC6 knockdown cytosol has decreased ATP-binding affinity, and it does not assemble stable GR.hsp90 heterocomplexes when it is a component of a purified five-protein assembly system. Incubation of knockdown cell hsp90 with purified HDAC6 converts the hsp90 to wild-type behavior. Thus, acetylation of hsp90 results in dynamic GR.hsp90 heterocomplex assembly/disassembly, and this is manifest in the cell as a approximately 100-fold shift to the right in the steroid dose response for gene activation.