Besides acting as molecular chaperones, the amphitropic small heat shock proteins (sHsps) are suggested to play an additional role in membrane quality control. We investigated sHsp membrane function in the model cyanobacterium Synechocystis sp. PPC 6803 using mutants of the single sHsp from this organism, Hsp17. We examined mutants in the N-terminal arm, L9P and Q16R, for altered interaction with thylakoid and lipid membranes and examined the effects of these mutations on thylakoid functions. These mutants are unusual in that they retain their oligomeric state and chaperone activity in vitro but fail to confer thermotolerance in vivo. We found that both mutant proteins had dramatically altered membrane/lipid interaction properties. Whereas L9P showed strongly reduced binding to thylakoid and model membranes, Q16R was almost exclusively membrane-associated, properties that may be the cause of reduced heat tolerance of cells carrying these mutations. Among the lipid classes tested, Q16R displayed the highest interaction with negatively charged SQDG. In Q16R cells a specific alteration of the thylakoid-embedded Photosystem II (PSII) complex was observed. Namely, the binding of plastoquinone and quinone analogue acceptors to the Q(B) site was modified. In addition, the presence of Q16R dramatically reduced UV-B damage of PSII activity because of enhanced PSII repair. We suggest these effects occur at least partly because of increased interaction of Q16R with SQDG in the PSII complex. Our findings further support the model that membrane association is a functional property of sHsps and suggest sHsps as a possible biotechnological tool to enhance UV protection of photosynthetic organisms.