The chaperonin GroEL is an oligomeric double ring structure that, together with the cochaperonin GroES, assists protein folding. Biochemical analyses indicate that folding occurs in a cis ternary complex in which substrate is sequestered within the GroEL central cavity underneath GroES. Recently, however, studies of GroEL "minichaperones" containing only the apical substrate binding subdomain have questioned the functional importance of substrate encapsulation within GroEL-GroES complexes. Minichaperones were reported to assist folding despite the fact that they are monomeric and therefore cannot form a central cavity. Here we compare directly the folding activity of minichaperones with that of the full GroEL-GroES system. In agreement with earlier studies, minichaperones assist folding of some proteins. However, this effect is observed only under conditions where substantial spontaneous folding is also observed and is indistinguishable from that resulting from addition of the nonchaperone protein alpha-casein. By contrast, the full GroE system efficiently promotes folding of several substrates under conditions where essentially no spontaneous folding is observed. These data argue that the full GroEL folding activity requires the intact GroEL-GroES complex, and in light of previous studies, underscore the importance of substrate encapsulation for providing a folding environment distinct from the bulk solution.