A novel class of heat shock protein 90 (Hsp90) inhibitors was developed after a low throughput screen (LTS) of a focused library containing approximately 21K compounds selected by virtual screening. The initial [1-{3-H-imidazo[4-5-c]pyridin-2-yl}-3,4-dihydro-2H-pyrido[2,1-a]isoindole-6-one] (1) compound showed moderate activity (IC(50) = 7.6 μM on Hsp82, the yeast homologue of Hsp90). A high-resolution X-ray structure shows that compound 1 binds into an "induced" hydrophobic pocket, 10-15 Å away from the ATP/resorcinol binding site. Iterative cycles of structure-based drug design (SBDD) and chemical synthesis led to the design and preparation of analogues with improved affinity. These optimized molecules make productive interactions within the ATP binding site as reported by other Hsp90 inhibitors. This resulted in compound 8, which is a highly potent inhibitor in biochemical and cellular assays (K(d) = 0.35 nM on Hsp90; IC(50) = 30 nM on SKBr3 mammary carcinoma cells) and in an in vivo leukemia model.