Bacterial AAA+ unfoldases are crucial for bacterial physiology by recognizing specific substrates and, typically, unfolding them for degradation by a proteolytic component. The caseinolytic protease (Clp) system is one example where a hexameric unfoldase (e.g., ClpC) interacts with the tetradecameric proteolytic core ClpP. Unfoldases can have both ClpP-dependent and ClpP-independent roles in protein homeostasis, development, virulence, and cell differentiation. ClpC is an unfoldase predominantly found in Gram-positive bacteria and mycobacteria. Intriguingly, the obligate intracellular Gram-negative pathogen Chlamydia, an organism with a highly reduced genome, also encodes a ClpC ortholog, implying an important function for ClpC in chlamydial physiology. Here, we used a combination of in vitro and in vivo approaches to gain insight into the function of chlamydial ClpC. ClpC exhibits intrinsic ATPase and chaperone activities, with a primary role for the Walker B motif in the first nucleotide binding domain (NBD1). Furthermore, ClpC binds ClpP1P2 complexes via ClpP2 to form the functional protease ClpCP2P1 in vitro, which degraded arginine-phosphorylated β-casein. In vivo experiments confirmed that higher order complexes of ClpC are present in chlamydial cells. Importantly, the in vivo data further revealed severe negative effects of both overexpression and depletion of ClpC in Chlamydia as revealed by a significant reduction in chlamydial growth. Here again, NBD1 was critical for ClpC function. Hence, we provide the first mechanistic insight into the molecular and cellular function of chlamydial ClpC, which supports its essentiality in Chlamydia. ClpC is, therefore, a potential novel target for the development of anti-chlamydial agents.