Recent years have witnessed dramatic advances in our understanding of how newly translated proteins fold in the cell and the contribution of molecular chaperones to this process. Folding in the cell must be achieved in a highly crowded macromolecular environment, in which release of nonnative polypeptides into the cytosolic solution might lead to formation of potentially toxic aggregates. Here I review the cellular mechanisms that ensure efficient folding of newly translated proteins in vivo. De novo protein folding appears to occur in a protected environment created by a highly processive chaperone machinery that is directly coupled to translation. Genetic and biochemical analysis shows that several distinct chaperone systems, including Hsp70 and the cylindrical chaperonins, assist the folding of proteins upon translation in the cytosol of both prokaryotic and eukaryotic cells. The cellular chaperone machinery is specifically recruited to bind to ribosomes and protects nascent chains and folding intermediates from nonproductive interactions. In addition, initiation of folding during translation appears to be important for efficient folding of multidomain proteins.