In the ligand-binding inactive state, the steroid receptor heterocomplex contains Hsp90, Hsp70, high–molecular weight immunophilins, and other proteins. Hsp90 acts in association with co-chaperones to maintain the native state of the receptor within the cells. It was reported earlier that Hsp90 might not be as important for the androgen receptor (AR) activity as for the glucocorticoid receptor (GR) and the progesterone receptor (PR) activities. We used the Hsp90 inhibitor geldanamycin (GA) to explore the role of Hsp90 in the function of the AR heterocomplex. GA selectively binds to Hsp90 and inhibits its activity, leading to the loss of steroid receptor activity, and frequently, its degradation. In our study, LNCaP prostate cancer cells were treated with GA for 30 minutes or 24 hours, in the presence of mibolerone, a synthetic androgen. GA reduced the androgen-induced AR protein levels to 15% after 24 hours of treatment. Several androgen up-regulated genes, including immunophilin FKBP51 and prostate specific antigen (PSA), were reduced by GA treatment. In cells treated with GA after transfection with a PSA promoter or an androgen response element–driven reporter gene, AR-mediated transactivation of reporter gene expression was reversibly inhibited by GA. Loss of androgen-binding ability and AR levels was attributed to reduced transcription of AR-regulated gene expression. Degradation rate of 35 S-labeled AR was significantly increased by GA in the presence or absence of mibolerone. GA induced the degradation of AR through the proteasomal pathway. AR in cells treated with proteasomal inhibitor lactacystin, was insoluble in Nonidet P-40 (NP40)-based buffer and could not restore the androgen-binding ability. We report here that GA treatment disrupted both hormone-binding activity and receptor protein stability, resulting in a dramatic loss of androgen-induced gene activation. These results show that Hsp90 activity is important for both the chaperone-mediated folding of the AR into a high-affinity ligand-binding conformation and the functional activity of the AR.