p23 is an Hsp90-associated protein that regulates signal transduction by the estrogen receptor alpha (ER); however, the mechanism through which p23 governs ER function remains enigmatic. To obtain a collection of p23 molecules with distinct effects on ER signaling, we screened in yeast a series of random mutations as well as specific sequence alterations based on the p23 crystal structure and further analyzed these mutations for their effect on p23-Hsp90 association in vitro and in vivo. We found that the ability of the p23 mutants to decrease or increase ER signal transduction correlated with their association with Hsp90. We also identified a mutation in the C-terminal tail of p23, which displayed a dominant inhibitory effect on ER transcriptional activation and associates more avidly with Hsp90 relative to the wild type p23. Interestingly, this mutant interacts with Hsp90 in its non-ATP-bound state, whereas the wild type p23 protein interacts exclusively with the ATP-bound form of Hsp90, which may account for its dominant phenotype. In addition, we have uncovered a novel activity of p23 that antagonizes Hsp90 action during times of cell stress. Using molecular modeling and the p23 crystal structure, we found that the p23 mutations affecting ER signaling identified in the screen localized to one face of the molecule, whereas those that had no effect mapped to other parts of the protein. Thus, our structure/function analysis has identified an important regulatory surface on p23 involved in ER signaling and p23 binding to Hsp90.