p97 is composed of two conserved AAA (ATPases associated with diverse cellular activities) domains, which form a tandem hexameric ring. We characterized the ATP hydrolysis mechanism of CDC-48.1, a p97 homolog of Caenorhabditis elegans. The ATPase activity of the N-terminal AAA domain was very low at physiological temperature, whereas the C-terminal AAA domain showed high ATPase activity in a coordinated fashion with positive cooperativity. The cooperativity and coordination are generated by different mechanisms because a noncooperative mutant still showed the coordination. Interestingly, the growth speed of yeast cells strongly related to the positive cooperativity rather than the ATPase activity itself, suggesting that the positive cooperativity is critical for the essential functions of p97.