Hsp110 proteins act as nucleotide exchange factors of the molecular chaperone Hsp70 in eukaryotes. In addition, they have been reported to stabilize unfolded proteins for subsequent refolding. Hsp110 proteins belong to the Hsp70 superfamily and, in analogy to Hsp70, the substrate-binding site was proposed to be located at the interface of the beta-sandwich domain and the three-helix-bundle domain. Saccharomyces cerevisiae has two closely related cytosolic isoforms of Hsp110, Sse1p and Sse2p. Under normal growth conditions, Sse1p is the predominant form. Sse2p is induced under stress conditions, such as heat shock. Consistent with these findings, we find that Sse2p has increased temperature stability. Both Sse1p and Sse2p accelerate nucleotide exchange on the yeast Hsp70 Ssa1p. Furthermore, Sse1p and Sse2p effectively compete for binding of unfolded luciferase. In contrast to Sse1p, however, Sse2p fails to stabilize this model substrate under thermal stress for subsequent Hsp70-mediated refolding. Using a domain shuffling approach, we show that both the nucleotide-binding domain and the beta-sandwich domain of Sse1p are required to preserve nonnative luciferase in a folding-competent state. Our findings suggest that Sse1p must undergo partial unfolding for efficient protection of luciferase, and that the beta-sandwich domain of Sse1p acts as an intramolecular chaperone for refolding of the nucleotide-binding domain. Under extreme stress conditions, Sse2p appears to take over the nucleotide exchange factor function of Sse1p and might promote the controlled aggregation of stress-denatured proteins.