Murine double minute 2 (MDM2) protein exhibits many diverse biochemical functions on the tumour suppressor protein p53, including transcriptional suppression and E3 ubiquitin ligase activity. However, more recent data have shown that MDM2 can exhibit ATP-dependent molecular chaperone activity and directly mediate folding of the p53 tetramer. Analysing the ATP-dependent function of MDM2 will provide novel insights into the evolution and function of the protein. We have established a system to analyse the molecular chaperone function of MDM2 on another of its target proteins, the transcription factor E2F1. In the absence of ATP, MDM2 was able to catalyse inhibition of the DNA-binding function of E2F1. However, the inhibition of E2F1 by MDM2 was stimulated by ATP, and mutation of the ATP-binding domain of MDM2 (K454A) prevented the ATP-stimulated inhibition of E2F1. Further, ATP stabilized the binding of E2F1 to MDM2 using conditions under which ATP destabilized the MDM2:p53 complex. However, the ATP-binding mutant of MDM2 was as active as an E3 ubiquitin ligase on E2F1 and p53, highlighting a specific function for the ATP-binding domain of MDM2 in altering substrate protein folding. Antibodies to three distinct domains of MDM2 neutralized its activity, showing that inhibition of E2F1 is MDM2-dependent and that multiple domains of MDM2 are involved in E2F1 inhibition. Dimethylsulfoxide, which reduces protein unfolding, also prevented E2F1 inhibition by MDM2. These data support a role for the ATP-binding domain in altering the protein-protein interaction function of MDM2.