Reticulocyte lysate contains a chaperone system that assembles glucocorticoid receptor (GR).hsp90 heterocomplexes. Using purified proteins, we have prepared a five-protein heterocomplex assembly system consisting of two proteins essential for heterocomplex assembly-hsp90 and hsp70-and three proteins that act as co-chaperones to enhance assembly-Hop, hsp40, p23 [Morishima, Y., Kanelakis, K. C., Silverstein, A. M., Dittmar, K. D., Estrada, L., and Pratt, W. B. (2000) J. Biol. Chem. 275, 6894-6900]. The hsp70 co-chaperone Hip has been recovered in receptor.hsp90 heterocomplexes at an intermediate stage of assembly in reticulocyte lysate, and Hip is also thought to be an intrinsic component of the assembly machinery. Here we show that immunodepletion of Hip from reticulocyte lysate or addition of high levels of Hip to the purified five-protein system does not affect GR.hsp90 heterocomplex assembly or the activation of steroid binding activity that occurs with assembly. Despite the fact that Hip does not affect assembly, it is recovered in GR.hsp90 heterocomplexes assembled by both systems. In the five-protein system, Hip prevents inhibition of assembly by the hsp70 co-chaperone BAG-1, and cotransfection of Hip with BAG-1 opposes BAG-1 reduction of steroid binding activity in COS cells. We conclude that Hip is not a component of the assembly machinery but that it could play a regulatory role in opposition to BAG-1.