Virtually nothing is known about the interaction of co-translationally active chaperones with nascent polypeptides and the resulting effects on peptide conformation and folding. We have explored this issue by NMR analysis of apomyoglobin N-terminal fragments of increasing length, taken as models for different stages of protein biosynthesis, in the absence and presence of the substrate binding domain of Escherichia coli Hsp70, DnaK-beta. The incomplete polypeptides misfold and self-associate under refolding conditions. In the presence of DnaK-beta, however, formation of the original self-associated species is completely or partially prevented. Chaperone interaction with incomplete protein chains promotes a globally unfolded dynamic DnaK-beta-bound state, which becomes folding-competent only upon incorporation of the residues corresponding to the C-terminal H helix. The chaperone does not bind the full-length protein at equilibrium. However, its presence strongly disfavors the kinetic accessibility of misfolding side-routes available to the full-length chain. This work supports the role of DnaK as a "holder" for incomplete N-terminal polypeptides. However, as the chain approaches its full-length status, the tendency to intramolecularly bury non-polar surface efficiently outcompetes chaperone binding. Under these conditions, DnaK serves as a "folding enhancer" by supporting folding of a population of otherwise folding-incompetent full-length protein chains.