AAA proteins share a conserved active site for ATP hydrolysis and regulate many cellular processes. AAA proteins are oligomeric and often have multiple ATPase domains per monomer, which is suggestive of complex allosteric kinetics of ATP hydrolysis. Here, using wild-type Hsp104 in the hexameric state, we demonstrate that its two AAA modules (NBD1 and NBD2) have very different catalytic activities, but each displays cooperative kinetics of hydrolysis. Using mutations in the AAA sensor-1 motif of NBD1 and NBD2 that reduce the rate of ATP hydrolysis without affecting nucleotide binding, we also examine the consequences of keeping each site in the ATP-bound state. In vitro, reducing k(cat) at NBD2 significantly alters the steady-state kinetic behavior of NBD1. Thus, Hsp104 exhibits allosteric communication between the two sites in addition to homotypic cooperativity at both NBD1 and NBD2. In vivo, each sensor-1 mutation causes a loss-of-function phenotype in two assays of Hsp104 function (thermotolerance and yeast prion propagation), demonstrating the importance of ATP hydrolysis as distinct from ATP binding at each site for Hsp104 function.