The cytosolic chaperone network of Saccharomyces cerevisiae is intimately associated with the emergence and maintenance of prion traits. Recently, the Hsp110 protein, Sse1, has been identified as a nucleotide exchange factor (NEF) for both cytosolic Hsp70 chaperone family members, Ssa1 and Ssb1. We have investigated the role of Sse1 in the de novo formation and propagation of [PSI(+)], the prion form of the translation termination factor, Sup35. As observed by others, we find that Sse1 is essential for efficient prion propagation. Our results suggest that the NEF activity is required for maintaining sufficient levels of substrate-free Ssa1. However, Sse1 exhibits an additional NEF-independent activity; it stimulates in vitro nucleation of Sup35NM, the prion domain of Sup35. We also observe that high levels of Sse1, but not of an unrelated NEF, very potently inhibit Hsp104-mediated curing of [PSI(+)]. Taken together, these results suggest a chaperone-like activity of Sse1 that assists in stabilization of early folding intermediates of the Sup35 prion conformation. This activity is not essential for prion formation under conditions of Sup35 overproduction, however, it may be relevant for spontaneous [PSI(+)] formation as well as for protection of the prion trait upon physiological Hsp104 induction.