Cerebral dopamine neurotrophic factor (CDNF) is an unconventional neurotrophic factor that is a disease-modifying drug candidate for Parkinson’s disease. CDNF has pleiotropic protective effects on stressed cells, but its mechanism of action remains incompletely understood. Here, we use state-of-the-art advanced structural techniques to resolve the structural basis of CDNF interaction with GRP78, the master regulator of the unfolded protein response (UPR) pathway. Subsequent binding studies confirm the obtained structural model of the complex, eventually revealing the interaction site of CDNF and GRP78. Finally, mutating the key residues of CDNF mediating its interaction with GRP78 not only results in impaired binding of CDNF but also abolishes the neuroprotective activity of CDNF-derived peptides in mesencephalic neuron cultures. These results suggest that the molecular interaction with GRP78 mediates the neuroprotective actions of CDNF and provide a structural basis for development of next generation CDNF-based therapeutic compounds against neurodegenerative diseases.