Background: Molecular chaperones recognize nonnative proteins and orchestrate cellular folding processes in conjunction with regulatory cofactors. However, not every attempt to fold a protein is successful, and misfolded proteins can be directed to the cellular degradation machinery for destruction. Molecular mechanisms underlying the cooperation of molecular chaperones with the degradation machinery remain largely enigmatic so far. Results: By characterizing the chaperone cofactors BAG-1 and CHIP, we gained insight into the cooperation of the molecular chaperones Hsc70 and Hsp70 with the ubiquitin/proteasome system, a major system for protein degradation in eukaryotic cells. The cofactor CHIP acts as a ubiquitin ligase in the ubiquitination of chaperone substrates such as the raf-1 protein kinase and the glucocorticoid hormone receptor. During targeting of signaling molecules to the proteasome, CHIP may cooperate with BAG-1, a ubiquitin domain protein previously shown to act as a coupling factor between Hsc/Hsp70 and the proteasome. BAG-1 directly interacts with CHIP; it accepts substrates from Hsc/Hsp70 and presents associated proteins to the CHIP ubiquitin conjugation machinery. Consequently, BAG-1 promotes CHIP-induced degradation of the glucocorticoid hormone receptor in vivo. Conclusions: The ubiquitin domain protein BAG-1 and the CHIP ubiquitin ligase can cooperate to shift the activity of the Hsc/Hsp70 chaperone system from protein folding to degradation. The chaperone cofactors thus act as key regulators to influence protein quality control