Ydj1 is a member of the Hsp40 (DnaJ-related) chaperone family that facilitates cellular protein folding by regulating Hsp70 ATPase activity and binding unfolded polypeptides. Ydj1 contains four conserved subdomains that appear to represent functional units. To define the action of these regions, protease-resistant Ydj1 fragments and Ydj1 mutants were analyzed for activities exhibited by the unmodified protein. The Ydj1 mutant proteins analyzed were unable to support growth of yeast at elevated temperatures and were found to have alterations in the J-domain (Ydj1 H34Q), zinc finger-like region (Ydj1 C159T), and conserved carboxyl terminus (Ydj1 G315D). Fragment Ydj1 (1-90) contains the J-domain and a small portion of the G/F-rich region and could regulate Hsp70 ATPase activity but could not suppress the aggregation of the model protein rhodanese. Ydj1 H34Q could not regulate the ATPase activity of Hsp70 but could bind unfolded polypeptides. The J-domain functions independently and was sufficient to regulate Hsp70 ATPase activity. Fragment Ydj1 (179-384) could suppress rhodanese aggregation but was unable to regulate Hsp70. Ydj1 (179-384) contains the conserved carboxyl terminus of DnaJ but is missing the J-domain, G/F-rich region, and a major portion of the zinc finger-like region. Ydj1 G315D exhibited severe defects in its ability to suppress rhodanese aggregation and form complexes with unfolded luciferase. The conserved carboxyl terminus of Ydj1 appeared to participate in the binding of unfolded polypeptides. Ydj1 C159T could form stable complexes with unfolded proteins and suppress protein aggregation but was inefficient at refolding denatured luciferase. The zinc finger-like region of Ydj1 appeared to function in conjunction with the conserved carboxyl terminus to fold proteins. However, Ydj1 does not require an intact zinc finger-like region to bind unfolded polypeptides. These data suggest that the combined functions of the J-domain, zinc finger-like region, and the conserved carboxyl terminus are required for Ydj1 to cooperate with Hsp70 and facilitate protein folding in the cell.