Grp170 and Hsp110 proteins constitute two evolutionary distinct branches of the Hsp70 family that share the ability to function as nucleotide exchange factors (NEFs) for canonical Hsp70s. Although the NEF mechanism of the cytoplasmic Hsp110s is well understood, little is known regarding the mechanism used by Grp170s in the endoplasmic reticulum. In this study, we compare the yeast Grp170 Lhs1 with the yeast Hsp110 Sse1. We find that residues important for Sse1 NEF activity are conserved in Lhs1 and that mutations in these residues in Lhs1 compromise NEF activity. As previously reported for Sse1, Lhs1 requires ATP to trigger nucleotide exchange in its cognate Hsp70 partner Kar2. Using site-specific cross-linking, we show that the nucleotide-binding domain (NBD) of Lhs1 interacts with the NBD of Kar2 face to face, and that Lhs1 contacts the side of the Kar2 NBD via its protruding C-terminal ␣-helical domain. To directly address the mechanism of nucleotide exchange, we have compared the hydrogen-exchange characteristics of a yeast Hsp70 NBD (Ssa1) in complex with either Sse1 or Lhs1. We find that Lhs1 and Sse1 induce very similar changes in the conformational dynamics in the Hsp70. Thus, our findings demonstrate that despite some differences between Hsp110 and Grp170 proteins, they use a similar mechanism to trigger nucleotide exchange.The Hsp70 chaperones are essential components of the cellular machinery that controls the conformational states of proteins. They are involved in diverse functions, including folding of proteins, transport of proteins across membranes, and regulation of signal transduction components (1, 2). The common activity of Hsp70 chaperones that underlies these diverse functions is the transient binding to peptide segments of protein substrates. The association of Hsp70 with substrates is controlled by its ATPase cycle. When ATP is bound to the N-terminal nucleotide-binding domain (NBD), 4 interdomain communication ensures that the C-terminal substrate-binding domain (SBD) exhibits low affinity for substrates, which consequently bind and release with high rates. Hydrolysis of ATP converts Hsp70 to the ADP-bound conformation, which traps the substrate with higher affinity. Exchange of ADP for ATP and concomitant substrate release completes this chaperone cycle.The chaperone cycle of Hsp70s is regulated by cofactors that facilitate either ATP hydrolysis or exchange of ADP for ATP. ATP hydrolysis is stimulated by J-domain-harboring co-chaperones of the Hsp40 class that provide substrate specificity to the Hsp70 chaperone by delivering clients. Release of substrate from Hsp70 is facilitated by nucleotide-exchange factors (NEFs) that accelerate nucleotide dissociation, thereby allowing ATP to rebind. NEFs function by associating with and stabilizing specific conformations of the Hsp70 NBD that exhibit low affinity for nucleotide. Rebinding of ATP to the Hsp70 results in dissociation of the NEF.Several structurally unrelated proteins function as NEFs for Hsp70s. Recent structural and biochemical ana...