Previous studies have demonstrated the ATP-dependent formation of a complex containing the heat shock protein hsp90, the unique hsp90 binding protein p23, and one of three high molecular weight immunophilins. In the present study, hsp90 and p23 are shown to form a complex that requires elevated temperature and ATP/ Mg 2؉ . Complex formation is strongly promoted by molybdate and by the nonionic detergent Nonidet P-40. ADP and the benzoquinone ansamycin, geldanamycin, are potent inhibitors of complex formation. The ATP-dependent process alters the state of hsp90, not p23, and influences the ability of hsp90 to bind to phenyl-Sepharose. Conversion of hsp90 to the ATP-bound state lowers its affinity for phenyl-Sepharose. These results show that hsp90 can exist in at least two functional states, one able to bind p23 and the other with a high affinity for hydrophobic resins. A model is presented where these states are dictated by the binding of either ATP or ADP.