Eye lens alpha-crystallin is a member of the small heat shock protein (sHSP) family and forms large multimeric structures. Earlier studies have shown that it can act like a molecular chaperone and form a stable complex with partially unfolded proteins. We have observed that prior binding of the hydrophobic protein melittin to alpha-crystallin diminishes its chaperone-like activity toward denaturing alcohol dehydrogenase, suggesting the presence of mutually exclusive sites for these proteins in alpha-crystallin. To investigate the mechanism of the interaction between alpha-crystallin and substrate proteins, we determined the melittin-binding sites in alpha-crystallin by cross-linking studies. Localization of melittin-binding sites in alpha-crystallin resulted in the identification of RTLGPFYPSR and FVIFLDVKHFSPEDLTVK of alphaA-crystallin and FSVNLDVK of alphaB-crystallin as the chaperone sites. Of these sites, FVIFLDVKHFSPEDLTVK and FSVNLDVK were identified earlier as 1,1'-bi(4-anilino) naphthalene-5,5'-disulfonic acid (bis-ANS)-binding hydrophobic sites. Here we also report the synthesis and characterization of the peptide, KFVIFLDVKHFSPEDLTVK, having the melittin as well as bis-ANS-binding sequence of alphaA-crystallin. We show that this peptide has characteristics similar to that of alphaA-crystallin by in vitro thermal aggregation assay, gel filtration study, CD spectroscopy, and bis-ANS interaction studies. The peptide sequence corresponds to the beta3 and beta4 region present in the alpha-crystallin domain of sHSP 16.5. We hypothesize that the alpha-crystallin domain in other sHSPs may have a similar function and would likely possess the anti-aggregation property even when separated from the native protein.