In cells stably transfected and overexpressing the mouse mdr1 gene, multidrug resistance is associated with an increased ATP-dependent drug efflux. Analysis of the predicted amino acid sequence of the MDR1 protein revealed the presence of two putative nucleotide-binding sites (NBS). To assess the functional importance of these NBS in the overall drug resistance phenotype conferred by mdr1, we introduced amino acid substitutions in the core consensus sequence for nucleotide binding, GXGKST. Mutants bearing the sequence GXAKST or GXGRST at either of the two NBS of mdr1 and a double mutant harboring the sequence GXGRST at both NBS were generated. The integrity of the two NBS was essential for the biological activity of mdr1, since all five mutants were unable to confer drug resistance to hamster drug-sensitive cells in transfection experiments. Conversely, a lysine-to-arginine substitution outside the core consensus sequence had no effect on the activity of mdr1. Failure to reduce intracellular accumulation of [3H]vinblastine paralleled the loss of activity in cell clones expressing mutant MDR1 proteins. However, the ability to bind the photoactivatable ATP analog 8-azido ATP was retained in the five inactive MDR1 mutants. This result implies that an essential step subsequent to ATP binding is impaired in these mutants, possibly ATP hydrolysis or secondary conformational changes induced by ATP-binding or hydrolysis. Our results suggest that the two NBS function in a cooperative fashion, since mutations in a single NBS completely abrogated the biological activity of mdr1.