The molecular chaperone Hsp90 is involved in the stability and activity of its client proteins which largely comprise of kinases. Phosphorylation of Hsp90 by these kinase clients provides a reciprocal regulatory mechanism between these proteins, however the mechanism of regulating the cellular pathway remains elusive. Here, we show that the serine/threonine kinase Atg1(yeast)/ULK1(mammalian) phosphorylates a conserved serine in the amino-domain of Hsp90 and reduces its ATPase activity hence lowers chaperone function. Broadly this modification negatively impacts the chaperoning of the kinase clients including Atg1/ULK1, yet enhances the activity of the non-kinase clients such as the heat shock factor and the steroid hormone receptors. Interestingly, ATG1/ULK1 mediated phosphorylation of the Hsp90 is essential for initiation of autophagy since yeast expressing a non-phosphorylatable Hsp90 were unable to undergo autophagy and the phosphomimetic Hsp90 mutants were underwent autophagy even in the absence of stimulus. Our findings provide a new paradigm where kinase client mediated phosphorylation of Hsp90 not only regulates the chaperone function but it is essential to initiate and regulate the relevant signaling pathway.