P‐glycoprotein (Pgp) is a membrane‐transport ATPase. It uses energy from ATP hydrolysis to transport pleiotropic cytotoxic drugs from inside to outside of cells. Thus, elevated expression of Pgp in cancer cells causes multidrug resistance. It is now known that the conformational state of Pgp changes during its catalytic cycle. However, how ATP hydrolysis relates to drug binding by Pgp is yet to be determined. In this study, we used limited trypsin digestion of Pgp in isolated inside‐out membrane vesicles to investigate the effects of drugs on Pgp conformation and to determine the drug‐bound conformational states of Pgp in the catalytic cycle. We found that (a) binding of vinblastine or verapamil alone can cause a conformational change in Pgp, but the change induced by the drug binding is different from that induced by nucleotide binding, (b) there may be at least two binding sites for Pgp substrates, one for drugs such as vinblastine and verapamil and the other for drugs such as colchicine and adriamycin, (c) the conformation of Pgp bound by ATP and vinblastine is different from the conformation bound by either one alone, and (d) the ADP‐bound Pgp does not bind vinblastine. Based on these observations and our previous studies, we propose a model for drug binding and transport in the catalytic cycle of Pgp.