Lafora disease (LD) is an autosomal recessive neurodegenerative disorder caused by mutation in either the dual specificity phosphatase laforin or ubiquitin ligase malin. A pathological hallmark of LD is the accumulation of cytoplasmic polyglucosan inclusions commonly known as Lafora bodies in both neuronal and non-neuronal tissues. How mutations in these two proteins cause disease pathogenesis is not well understood. Malin interacts with laforin and recruits to aggresomes upon proteasome inhibition and was shown to degrade misfolded proteins. Here we report that malin is spontaneously misfolded and tends to be aggregated, degraded by proteasomes, and forms not only aggresomes but also other cytoplasmic and nuclear aggregates in all transfected cells upon proteasomal inhibition. Malin also interacts with Hsp70. Several disease-causing mutants of malin are comparatively more unstable than wild type and form aggregates in most transfected cells even without the inhibition of proteasome function. These cytoplasmic and nuclear aggregates are immunoreactive to ubiquitin and 20 S proteasome. Interestingly, progressive proteasomal dysfunction and cell death is also most frequently observed in the mutant malin-overexpressed cells compared with the wild-type counterpart. Finally, we demonstrate that the co-chaperone carboxyl terminus of the Hsc70-interacting protein (CHIP) stabilizes malin by modulating the activity of Hsp70. All together, our results suggest that malin is unstable, and the aggregate-prone protein and co-chaperone CHIP can modulate its stability.