Heat shock protein 90 (Hsp90) is an emerging target for cancer therapy due to its important role in maintaining the activity and stability of key oncogenic signaling proteins. We show here that the echinoderm microtubule-associated protein-like 4 (EML4)-anaplastic lymphoma kinase (ALK) fusion protein, presumed to be the oncogenic driver in about 5% of patients with non-small cell lung cancer (NSCLC), is associated with Hsp90 in cells and is rapidly degraded upon exposure of cells to IPI-504. We find EML4-ALK to be more sensitive to Hsp90 inhibition than either HER2 or mutant epidermal growth factor receptor (EGFR) with an inhibitory concentration (IC)(50) for protein degradation in the low nanomolar range. This degradation leads to a potent inhibition of downstream signaling pathways and to the induction of growth arrest and apoptosis in cells carrying the EML4-ALK fusion. To generate a causative link between the expression of EML4-ALK and sensitivity to IPI-504, we introduced an EML4-ALK cDNA into HEK293 cells and show that the expression of the fusion protein sensitizes cells to IPI-504 both in vitro and in vivo. In a xenograft model of a human NSCLC cell line containing the ALK rearrangement, we observe tumor regression at clinically relevant doses of IPI-504. Finally, cells that have been selected for resistance to ALK kinase inhibitors retain their sensitivity to IPI-504. We have recently observed partial responses to administration of IPI-504 as a single agent in a phase 2 clinical trial in patients with NSCLC, specifically in patients that carry an ALK rearrangement. This study provides a molecular explanation for these clinical observations.