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Heat shock proteins (Hsps) were first identified as proteins whose synthesis was enhanced by stresses such as an increase in temperature. Recently, several of the major Hsps have been shown to be intimately involved in protein biogenesis through a direct interaction with a wide variety of proteins. As a reflection of this role, these Hsps have been referred to as molecular chaperones. Hsp70s interact with incompletely folded proteins, such as nascent chains on ribosomes and proteins in the process of translocation from the cytosol into mitochondria and the endoplasmic reticulum. Hsp60 also binds to unfolded proteins, preventing aggregation and facilitating protein folding. Although less well defined, other Hsps such as Hsp90 also play important roles in modulating the activity of a number of proteins. The function of the proteolytic system is intertwined with that of molecular chaperones. Several components of this system, encoded by heat-inducible genes, are responsible for the degradation of abnormal or misfolded proteins. The budding yeast Saccharomyces cerevisiae has proven very useful in the analysis of the role of molecular chaperones in protein maturation, translocation, and degradation. In this review, results of experiments are discussed within the context of experiments with other organisms in an attempt to describe the current state of understanding of these ubiquitous and important proteins.