We have compared 70-kDa heat shock cognate protein (Hsc70) isolated from bovine brain with recombinant wild type protein and mutant E543K protein (previously studied as wild type in our laboratory). Wild type bovine and recombinant protein differ by posttranslational modification of lysine 561 but interact similarly with a short peptide (fluorescein-labeled FYQLALT) and with denatured staphylococcal nuclease-(Delta135-149). Mutation E543K results in 4. 5-fold faster release of peptide and lower stability of complexes with staphylococcal nuclease-(Delta135-149). ATP hydrolysis rates of the wild type proteins are enhanced 6-10-fold by the addition of peptide. The E543K mutant has a peptide-stimulated hydrolytic rate similar to that of wild type protein but a higher unstimulated rate, yielding a mere 2-fold enhancement. All three versions of Hsc70 possess similar ATP-dependent conformational shifts, and all show potassium ion dependence. These data support the following model: (i) in the presence of K+, Mg2+, and ATP, the peptide binding domain inhibits the ATPase; (ii) binding of peptide relieves this inhibition; and (iii) the E543K mutation significantly attenuates the inhibition by the peptide binding domain and destabilizes Hsc70-peptide complexes.