17-Allylamino-17-demethoxygeldanamycin (17-AAG) is a new anticancer agent currently in clinical trials. The ability of 17-AAG to abrogate the function of heat-shock protein Hsp90 and modulate cellular sensitivity to anticancer agents has prompted recent research to use this compound in drug combination therapy. Here we report that 17-AAG has striking opposite effects on the activity of arsenic trioxide (ATO) and ara-C. Combination of 17-AAG with ATO exhibited a synergistic effect in leukemia cells, whereas coincubation of 17-AAG and ara-C showed antagonistic activity. Mechanistic studies revealed that ATO exerted cytotoxic action by reactive oxygen species generation, and activated Akt survival pathway. 17-AAG abrogated Akt activation and enhanced the activity of ATO. In contrast, treatment of leukemia cells with 17-AAG caused a G1 arrest, a decrease in DNA synthesis and reduced ara-C incorporation into DNA, leading to antagonism. The ability of 17-AAG to enhance the antileukemia activity of ATO was further demonstrated in primary leukemia cells isolated from patients with acute myeloid leukemia and chronic lymphocytic leukemia, including cells from refractory patients. Our data suggest that combination of 17-AAG and ATO may be an effective therapeutic regimen. Caution should be exercised in using 17-AAG together with ara-C, as their combination effects are schedule dependent.