Hsp90 is a molecular chaperone that interacts with a specific set of client proteins and assists their folding. The underlying molecular mechanisms, involving dynamic transitions between open and closed conformations, are still enigmatic. Combining nuclear magnetic resonance, small-angle x-ray scattering, and biochemical experiments, we have identified a key intermediate state of Hsp90 induced by adenosine triphosphate (ATP) binding, in which rotation of the Hsp90 N-terminal domain (NTD) yields a domain arrangement poised for closing. This ATP-stabilized NTD rotation is allosterically communicated across the full Hsp90 dimer, affecting distant client sites. By analyzing the interactions of four distinct clients, i.e., steroid hormone receptors (glucocorticoid receptor and mineralocorticoid receptor), p53, and Tau, we show that client-specific interactions with Hsp90 select and enhance the NTD-rotated state and promote closing of the full-length Hsp90 dimer. The p23 co-chaperone shifts the population of Hsp90 toward the closed state, thereby enhancing client interaction and processing.