The N-terminal domain of eukaryotic Hsp90 proteins contains a conserved adenosine nucleotide binding pocket that also serves as the binding site for the Hsp90 inhibitors geldanamycin and radicicol. Although this domain is essential for Hsp90 function, the molecular basis for adenosine nucleotide-dependent regulation of GRP94, the endoplasmic reticulum paralog of Hsp90, remains to be established. We report that bis-ANS (1,1'-bis(4-anilino-5-napthalenesulfonic acid), an environment sensitive fluorophore known to interact with nucleotide-binding domains, binds to the adenosine nucleotide-binding domain of GRP94 and thereby activates its molecular chaperone and peptide binding activities. bis-ANS was observed to elicit a tertiary conformational change in GRP94 similar to that occurring upon heat shock, which also activates GRP94 function. bis-ANS activation of GRP94 function was efficiently blocked by radicicol, an established inhibitory ligand for the adenosine nucleotide binding pocket. Confirmation of the N-terminal nucleotide binding pocket as the bis-ANS-binding site was obtained following covalent incorporation of bis-ANS into GRP94, trypsinolysis, and sequencing of bis-ANS-labeled limit digestion products. These data identify a ligand dependent regulation of GRP94 function and suggest a model whereby GRP94 function is regulated through a ligand-dependent conversion of GRP94 from an inactive to an active conformation.