The SlyD ( sensitive to lysis D) protein of Escherichia coli is a folding enzyme with a chaperone domain and a prolyl isomerase domain of the FK506 binding protein type. Here we investigated how the two domains and their interplay are optimized for function in protein folding. Unfolded protein molecules initially form a highly dynamic complex with the chaperone domain of SlyD, and they are then transferred to the prolyl isomerase domain. The turnover number of the prolyl isomerase site is very high and guarantees that, after transfer, prolyl peptide bonds in substrate proteins are isomerized very rapidly. The Michaelis constant of catalyzed folding reflects the substrate affinity of the chaperone domain, and the turnover number is presumably determined by the rate of productive substrate transfer from the chaperone to the prolyl isomerase site and by the intrinsic propensity of the refolding protein chain to leave the active site with the native prolyl isomer. The efficiency of substrate transfer is high because dissociation from the chaperone site is very fast and because the two sites are close to each other. Protein molecules that left the prolyl isomerase site with an incorrect prolyl isomer can rapidly be re-bound by the chaperone domain because the association rate is very high as well.