The chaperone activity of Hsp70 is influenced by the activities of both pos
itive and negative regulatory proteins. In this study, we provide first tim
e evidence for the stimulating effect of the Hsp70-interacting protein Hip
on the chaperone activity in the mammalian cytosol, Overexpressing Hip enha
nces the refolding of the heat-inactivated reporter enzyme luciferase expre
ssed in hamster lung fibroblasts. Also, it protects luciferase from irrever
sible denaturation under conditions of ATP depletion. We demonstrate that t
hese stimulating actions depend on both the presence of the central Hsp70-b
inding site and the amino-terminal homo-oligomerization domain of Hip. The
carboxyl terminus (amino acids 257-368) comprising the 7 GGMP repeats (Hsc7
0-like domain) and the Sti1p-like domain are dispensable for the Hip-mediat
ed stimulation of the cellular chaperone activity. Bag-1, which inhibits th
e Hsp70 chaperone activity both in vitro and in vivo, was found to compete
with the stimulatory action of Hip. In cells overexpressing both Hip and Ba
g-1, the inhibitory effects of Bag-1 were found to be dominant. Our results
reveal that in vivo a complex level of regulation of the cellular chaperon
e activity exists that not only depends on the concentration of Hsp70 but a
lso on the concentration, affinity, and intracellular localization of posit
ive and negative coregulators. As the Hsp70 chaperone machine is also prote
ctive in the absence of ATP, our data also demonstrate that cycling between
an ATP/ADP-bound state is not absolutely required for the Hsp70 chaperone
machine to be active in vivo.