Nonaqueous co-solvents, particularly 2,2,2-trifluoroethanol (TFE), have been used as tools to study protein folding. By analyzing FKBP12, an alpha/beta-protein that folds with two-state kinetics, we have been able to address three key questions concerning the use of TFE. First, does TFE perturb the folding pathway? Second, can the observed changes in the rate of folding and unfolding in TFE be attributed to a change in free energy of a single state? Finally, can TFE be used to infer information on secondary structure formation in the transition state? Protein engineering experiments on FKBP12, coupled with folding and unfolding experiments in 0% and 9.6% TFE, conclusively show that TFE does not perturb the folding pathway of this protein. Our results also suggest that the changes in folding and unfolding rates observed in 9.6% TFE are due to a global effect of TFE on the protein, rather than the stabilization of any elements of secondary structure in the transition state. Thus, studies with TFE and other co-solvents can be accurately interpreted only when combined with other techniques.