Hsp90 is an abundant molecular chaperone essential to the establishment of many cellular regulation and signal transduction systems, but remains one of the least well described chaperones. The biochemical mechanism of protein folding by Hsp90 is poorly understood, and the direct involvement of ATP has been particularly contentious. Here we demonstrate in vitro an inherent ATPase activity in both yeast Hsp90 and the Escherichia coli homologue HtpG, which is sensitive to inhibition by the Hsp90-specific antibiotic geldanamycin. Mutations of residues implicated in ATP binding and hydrolysis by structural studies abolish this ATPase activity in vitro and disrupt Hsp90 function in vivo. These results show that Hsp90 is directly ATP dependent in vivo, and suggest an ATP-coupled chaperone cycle for Hsp90-mediated protein folding.