The archaeal ATPase complex PAN, the homolog of the eukaryotic 26S proteasome-regulatory ATPases, was shown to associate transiently with the 20S proteasome upon binding of ATP or ATPgammaS, but not ADP. By electron microscopy (EM), PAN appears as a two-ring structure, capping the 20S, and resembles two densities in the 19S complex. The N termini of the archaeal 20S alpha subunits were found to function as a gate that prevents entry of seven-residue peptides but allows entry of tetrapeptides. Upon association with the 20S particle, PAN stimulates gate opening. Although degradation of globular proteins requires ATP hydrolysis, the PAN-20S complex with ATPgammaS translocates and degrades unfolded and denatured proteins. Rabbit 26S proteasomes also degrade these unfolded proteins upon ATP binding, without hydrolysis. Thus, although unfolding requires energy from ATP hydrolysis, ATP binding alone supports ATPase-20S association, gate opening, and translocation of unfolded substrates into the proteasome, which can occur by facilitated diffusion through the ATPase.