P-glycoprotein (ABCB1) is an important component of barrier tissues that extrudes a wide range of chemically unrelated compounds. ABCB1 consists of two transmembrane domains forming the substrate binding and translocation domain, and of two cytoplasmic nucleotide binding domains (NBDs) that provide the energy by binding and hydrolyzing ATP. We analyzed the mechanistic and energetic properties of the NBD dimer via molecular dynamics simulations. We find that MgATP stabilizes the NBD dimer through strong attractive forces by serving as an interaction hub. The irreversible ATP hydrolysis step converts the chemical energy stored in the phosphate bonds of ATP into potential energy. Following ATP hydrolysis, interactions between the NBDs and the ATP hydrolysis products MgADP + Pi remain strong, mainly because Mg2+ forms stabilizing interactions with ADP and Pi. Despite these stabilizing interactions MgADP + Pi are unable to hold the dimer together, which becomes separated by avid interactions of MgADP + Pi with water. ATP binding to the open NBDs and ATP hydrolysis in the closed NBD dimer represent two steps of energy input, each leading to the formation of a high energy state. Relaxation from these high energy states occurs through conformational changes that push ABCB1 through the transport cycle.