We have examined the role of NAD(P)H:quinone oxidoreductase 1 (NQO1) in the bioreductive metabolism of 17-allylamino-demethoxygeldanamycin (17-AAG). High-performance liquid chromatography (HPLC) analysis of the metabolism of 17-AAG by recombinant human NQO1 revealed the formation of a more polar metabolite 17-AAGH2. The formation of 17-AAGH2 was NQO1 dependent, and its formation could be inhibited by the addition of 5-methoxy-1,2-dimethyl-3-[(4-nitrophenoxy)methyl]indole-4,7-dione (ES936), a mechanism-based (suicide) inhibitor of NQO1. The reduction of 17-AAG to the corresponding hydroquinone 17-AAGH2 was confirmed by tandem liquid chromatography-mass spectrometry. 17-AAGH2 was relatively stable and only slowly underwent autooxidation back to 17-AAG over a period of hours. To examine the role of NQO1 in 17-AAG metabolism in cells, we used an isogenic pair of human breast cancer cell lines differing only in NQO1 levels. MDA468 cells lack NQO1 due to a genetic polymorphism, and MDA468/NQ16 cells are a stably transfected clone that express high levels of NQO1 protein. HPLC analysis of 17-AAG metabolism using cell sonicates and intact cells showed that 17-AAGH2 was formed by MDA468/NQ16 cells, and formation of 17-AAGH2 could be inhibited by ES936. No 17-AAGH2 was detected in sonicates or intact MDA468 cells. Following a 4-hour treatment with 17-AAG, the MDA468/NQ16 cells were 12-fold more sensitive to growth inhibition compared with MDA468 cells. More importantly, the increased sensitivity of MDA468/NQ16 cells to 17-AAG could be abolished if the cells were pretreated with ES936. Cellular markers of heat shock protein (Hsp) 90 inhibition, Hsp70 induction, and Raf-1 degradation were measured by immunoblot analysis. Marked Hsp70 induction and Raf-1 degradation was observed in MDA468/NQ16 cells but not in MDA468 cells. Similarly, downstream Raf-1 signaling molecules mitogen-activated protein kinase/extracellular signal-regulated kinase (ERK) kinase and ERK also showed decreased levels of phosphorylation in MDA468/NQ16 cells but not in MDA468 cells. The ability of 17-AAG and 17-AAGH2 to inhibit purified yeast and human Hsp90 ATPase activity was examined. Maximal 17-AAG-induced ATPase inhibition was observed in the presence of NQO1 and could be abrogated by ES936, showing that 17-AAGH2 was a more potent Hsp90 inhibitor compared with 17-AAG. Molecular modeling studies also showed that due to increased hydrogen bonding between the hydroquinone and the Hsp90 protein, 17-AAGH2 was bound more tightly to the ATP-binding site in both yeast and human Hsp90 models. In conclusion, these studies have shown that reduction of 17-AAG by NQO1 generates 17-AAGH2, a relatively stable hydroquinone that exhibits superior Hsp90 inhibition.