GRP94 is a molecular chaperone that carries immunologically relevant peptides from cell to cell, transferring them to major histocompatibility proteins for presentation to T cells. Here we examine the binding of several peptides to recombinant GRP94 and study the regulation and site of peptide binding. We show that GRP94 contains a peptide-binding site in its N-terminal 355 amino acids. A number of peptides bind to this site with low on-and off-rates and with specificity that is distinct from that of another endoplasmic reticulum chaperone, BiP/GRP78. Binding to the N-terminal fragment is sufficient to account for the peptide binding activity of the entire molecule. Peptide binding is inhibited by radicicol, a known inhibitor of the chaperone activities of HSP90-family proteins. However, the peptide-binding site is distinct from the radicicol-binding pocket, because both can bind to the N-terminal fragment simultaneously. Furthermore, peptide binding does not cause the same conformational change as does binding of radicicol. When the latter binds to the N-terminal domain, it induces a conformational change in the downstream, acidic domain of GRP94, as measured by altered gel mobility and loss of an antibody epitope. These results relate the peptide-binding activity of GRP94 to its other function as a chaperone.