We have isolated a novel ATP-dependent robust protein-unfolding activity from S. cerevisiae and designated Unfoldin. ATP, but not its hydrolysis, promoted binding of Unfoldin to substrates and unfolded their conformation. Protein sequencing revealed that Unfoldin was identical to YDL178w identified as an actin interacting protein 2 (AIP2), the function of which is poorly understood. Gel-filtration and low angle shadowing electron microscopy revealed that Unfoldin formed a homo-oligomeric complex consisting of 10∼12 subunits arranged in an grapple-like structure with a ∼2 nm central cavity. Removal of the C-terminal coiled-coil region of Unfoldin led to dissociation of the oligomer concomitant with the loss of both substrate binding and protein-unfolding activity. Unfoldin bound to all substrates so far examined in vitro, and modified their conformation as determined by the trypsin susceptibility assay. It is worth noting that the robust protein-unfolding activity of Unfoldin modulated the conformation of several pathogenic, highly aggregated proteins such as prion protein in β-sheet form associated with prion disease, amyloid β(1–42) peptide with Alzheimer’s disease and α-synuclein with Parkinson’s disease, in the presence of ATP. Protein-unfolding activity of Unfoldin depends on the growth stage of yeast and the most significant activity was observed at the log phase, suggesting the presence of a cofactor/s. From the in vivo and in vitro experimental data, Unfoldin might have important roles in a development of new treatments for the neurodegenerative disorders.