The BAG-1 protein appears to inhibit cell death by binding to Bcl-2, the Raf-1 protein kinase, and certain growth factor receptors, but the mechanism of inhibition remains enigmatic. BAG-1 also interacts with several steroid hormone receptors which require the molecular chaperones Hsc70 and Hsp90 for activation. Here we show that BAG-1 is a regulator of the Hsc70 chaperone. BAG-1 binds to the ATPase domain of Hsc70 and, in cooperation with Hsp40, stimulates Hsc70's steady-state ATP hydrolysis activity approximately 40-fold. Similar to the action of the GrpE protein on bacterial Hsp70, BAG-1 accelerates the release of ADP from Hsc70. Thus, BAG-1 regulates the Hsc70 ATPase in a manner contrary to the Hsc70-interacting protein Hip, which stabilizes the ADP-bound state. Intriguingly, BAG-1 and Hip compete in binding to the ATPase domain of Hsc70. Our results reveal an unexpected diversity in the regulation of Hsc70 and raise the possibility that the observed anti-apoptotic function of BAG-1 may be exerted through a modulation of the chaperone activity of Hsc70 on specific protein folding and maturation pathways.