The small heat shock proteins (sHSPs) recently have been reported to have molecular chaperone activity in vitro; however, the mechanism of this activity is poorly defined. We found that HSP18.1, a dodecameric sHSP from pea, prevented the aggregation of malate dehydrogenase (MDH) and glyceraldehyde-3-phosphate dehydrogenase heated to 45 degrees C. Under conditions in which HSP18.1 prevented aggregation of substrates, size-exclusion chromatography and electron microscopy revealed that denatured substrates coated the HSP18.1 dodecamers to form expanded complexes. SDS-PAGE of isolated complexes demonstrated that each HSP18.1 dodecamer can bind the equivalent of 12 MDH monomers, indicating that HSP18.1 has a large capacity for non-native substrates compared with other known molecular chaperones. Photoincorporation of the hydrophobic probe 1,1'-bi(4-anilino)naphthalene-5,5'-disulfonic acid (bis-ANS) into a conserved C-terminal region of HSP18.1 increased reversibly with increasing temperature, but was blocked by prior binding of MDH, suggesting that bis-ANS incorporates proximal to substrate binding regions and that substrate-HSP18.1 interactions are hydrophobic. We also show that heat-denatured firefly luciferase bound to HSP18.1, in contrast to heat-aggregated luciferase, can be reactivated in the presence of rabbit reticulocyte or wheat germ extracts in an ATP-dependent process. These data support a model in which sHSPs prevent protein aggregation and facilitate substrate refolding in conjunction with other molecular chaperones.