Here, we show that Nucleophsomin/B23 provides lysine 263 as a critical binding site for ATP. Mutagenesis of lysine 263 to asparagine (K263N) disrupts B23 from ATP binding. While B23 WT exclusively localizes to the nucleolus, the B23-K263N is redistributed from the nucleolus to the nucleoplam. Notably, the K263N mutant is unstable, and displayed rapid degradation. Alteration of K263 induced B23 instability through increased ubiquitination and proteaosomal degradation. Moreover, mutation of K263 impedes the mitogenic effect of B23 in PC12 cells. Thus, K263 is a critical site for ATP binding and required for B23 stability, confining B23 in the nucleolus.