Single-chain variable fragments (scFvs), composed of variable domains of heavy and light chains of an antibody joined by a linker, share antigen binding capacity with their parental antibody. Due to intrinsically low solubility and stability, only two Escherichia coli-produced scFvs have been approved for therapy. Here we report that a 33-residue peptide, termed P17 tag, increases the solubility of multiple scFvs produced in Escherichia coli SHuffle strain by up to 11.6 fold. Hydrophilic sequence, especially charged residues, but not the predicted α-helical secondary structure of P17 tag, contribute to the solubility enhancement. Notably, the P17 tag elevates the thermostability of scFv as efficiently as intra-domain disulfide bonds. Moreover, a P17-tagged scFv targeting hepatitis B virus surface proteins shows over two-fold higher antigen-binding affinity and virus-neutralizing activity than the untagged version. These data strongly suggest a type I intramolecular chaperone-like activity of the P17 tag. Hence, the P17 tag could benefit the research, production, and application of scFv.