Taurine is one of the osmolytes that maintain the structure of proteins in cells exposed to denaturing environmental stressors. Recently, cryoelectron tomographic analysis of eukaryotic cells has revealed that their cytoplasms are crowded with proteins. Such crowding conditions would be expected to hinder the efficient folding of nascent polypeptide chains. Therefore, we examined the role of taurine on the folding of denatured and reduced lysozyme, as a model protein, under a crowding condition. The results confirmed that taurine had a better effect on protein folding than did β-alanine, which has a similar chemical structure, when the protein to be folded was present at submillimolar concentration. NMR analyses further revealed that under the crowding condition, taurine had more interactions than did β-alanine with the lysozyme molecule in both the folded and denatured states. We concluded that taurine improves the folding of the reduced lysozyme at submillimolar concentration to allow it to interact more favorably with the lysozyme molecule. Thus, the role of taurine, as an osmolyte in vivo, may be to assist in the efficient folding of proteins.