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P-glycoprotein (P-gp, ABCB1) is a drug pump that confers multidrug resistance. Inhibition of P-gp would improve chemotherapy. Tariquidar is a potent P-gp inhibitor but its mechanism is unknown. Here, we tested our prediction that tariquidar inhibits P-gp cycling between the open and closed states during the catalytic cycle. Transition of P-gp to an open state can be monitored in intact cells using reporter cysteines introduced into extracellular loops 1 (A80C) and 4 (R741C). Residues A80C/R741C come close enough (<7 Å) to spontaneously cross-link in the open conformation (<7 Å) but are widely separated (>30 Å) in the closed conformation. Cross-linking of A80C/R741C can be readily detected because it causes the mutant protein to migrate slower on SDS-PAGE gels. We tested whether drug substrates or inhibitors could inhibit cross-linking of the mutant. It was found that only tariquidar blocked A80C/R741C cross-linking. Tariquidar was also a more potent pharmacological chaperone than other P-gp substrates/modulators such as cyclosporine A. Only tariquidar promoted maturation of misprocessed mutant F804D to yield mature P-gp. Tariquidar interacted with the transmembrane domains because it could rescue a misprocessed truncation mutant lacking the nucleotide-binding domains. These results show that tariquidar is a potent pharmacological chaperone and inhibits P-gp drug efflux by blocking transition to the open state during the catalytic cycle.