Heat shock protein 90 (Hsp90) is an emerging therapeutic target of interest for the treatment of cancer. Its role in protein homeostasis and the selective chaperoning of key signaling proteins in cancer survival and proliferation pathways has made it an attractive target of small molecule therapeutic intervention. 17-Allylamino-17-demethoxygeldanamycin (17-AAG), the most studied agent directed against Hsp90, suffers from poor physical-chemical properties that limit its clinical potential. Therefore, there exists a need for novel, patient-friendly Hsp90-directed agents for clinical investigation. IPI-504, the highly soluble hydroquinone hydrochloride derivative of 17-AAG, was synthesized as an Hsp90 inhibitor with favorable pharmaceutical properties. Its biochemical and biological activity was profiled in an Hsp90-binding assay, as well as in cancer-cell assays. Furthermore, the metabolic profile of IPI-504 was compared with that of 17-AAG, a geldanamycin analog currently in clinical trials. The anti-tumor activity of IPI-504 was tested as both a single agent as well as in combination with bortezomib in myeloma cell lines and in vivo xenograft models, and the retention of IPI-504 in tumor tissue was determined. In conclusion, IPI-504, a potent inhibitor of Hsp90, is efficacious in cellular and animal models of myeloma. It is synergistically efficacious with the proteasome inhibitor bortezomib and is preferentially retained in tumor tissues relative to plasma. Importantly, it was observed that IPI-504 interconverts with the known agent 17-AAG in vitro and in vivo via an oxidation-reduction equilibrium, and we demonstrate that IPI-504 is the slightly more potent inhibitor of Hsp90.