Recent work has shown that weak protein-protein interactions are susceptible to the cellular milieu. One case in point is the binding of heat shock proteins (Hsps) to substrate proteins in cells under stress. Upregulation of the Hsp70 chaperone machinery at elevated temperature was discovered in the 1960s, and more recent studies have shown that ATPase activity in one Hsp70 domain is essential for control of substrate binding by the other Hsp70 domain. Although there are several denaturant-based assays of Hsp70 activity, reports of ATP-dependent binding of Hsp70 to a globular protein substrate under heat shock are scarce. Here we show that binding of heat-inducible Hsp70 to phosphoglycerate kinase (PGK) is remarkably different in vitro compared to in-cell. We use fluorescent-labeled mHsp70 and ePGK, and begin by showing that mHsp70 passes the standard β-galactosidase assay, and that it does not self-aggregate until 50°C in presence of ATP. Yet during denaturant refolding or during in vitro heat shock, mHsp70 shows only ATP-independent non-specific sticking to ePGK, as evidenced by nearly identical results with an ATPase activity-deficient K71M mutant of Hsp70 as a control. Addition of Hsp40 (co-factor) or Ficoll (crowder) does not reduce non-specific sticking, but cell lysate does. Therefore, Hsp70 does not act as an ATP-dependent chaperone on its substrate PGK in vitro. In contrast, we observe only specific ATP-dependent binding of mHsp70 to ePGK in mammalian cells, when compared to the inactive Hsp70 K71M mutant. We hypothesize that enhanced in-cell activity is not due to an unknown co-factor, but simply to a favorable shift in binding equilibrium caused by the combination of crowding and osmolyte/macromolecular interactions present in the cell. One candidate mechanism for such a favorable shift in binding equilibrium is the proven ability of Hsp70 to bind near-native states of substrate proteins in vitro. We show evidence for early onset of binding in-cell. Our results suggest that Hsp70 binds PGK preemptively, prior to its full unfolding transition, thus stabilizing it against further unfolding. We propose a "preemptive holdase" mechanism for Hsp70-substrate binding. Given our result for PGK, more proteins than one might think based on in vitro assays may be chaperoned by Hsp70 in vivo. The cellular environment thus plays an important role in maintaining proper Hsp70 function.