Members of the Hsp70 protein family must work with other co-chaperones to exert their function. Herein, we identified a new Hsp70 co-chaperone, p49/STRAP, previously shown to interact with serum response factor. We demonstrated that a fraction of p49/STRAP was cytosolic, and that it interacted with the beta-sandwich domain of Hsp70. Although p49/STRAP had little effect on the intrinsic ATPase activity of Hsp70, it reduced the ATP-hydrolytic activity of Hsp70 stimulated by Hsp40, and inhibited the refolding activity of the Hsp70/Hsp40 system. Thus, p49/STRAP can be considered a bona fide co-chaperone of Hsp70.