ATP-independent chaperones are usually considered to be holdases that rapidly bind to non-native states of substrate proteins and prevent their aggregation. These chaperones are thought to release their substrate proteins prior to their folding. Spy is an ATP-independent chaperone that acts as an aggregation inhibiting holdase but does so by allowing its substrate proteins to fold while they remain continuously chaperone bound, thus acting as a foldase as well. The attributes that allow such dual chaperoning behavior are unclear. Here, we used the topologically complex protein apoflavodoxin to show that the outcome of Spy’s action is substrate specific and depends on its relative affinity for different folding states. Tighter binding of Spy to partially unfolded states of apoflavodoxin limits the possibility of folding while bound, converting Spy to a holdase chaperone. Our results highlight the central role of the substrate in determining the mechanism of chaperone action.