Molecular chaperones are an essential part of the machinery that avoids protein aggregation and misfolding in vivo. However, understanding the molecular basis of how chaperones prevent such undesirable interactions requires the conformational changes within substrate proteins to be probed during chaperone action. Here we use single-molecule fluorescence spectroscopy to investigate how the DnaJ-DnaK chaperone system alters the conformational distribution of the denatured substrate protein rhodanese. We find that in a first step the ATP-independent binding of DnaJ to denatured rhodanese results in a compact denatured ensemble of the substrate protein. The following ATP-dependent binding of multiple DnaK molecules, however, leads to a surprisingly large expansion of denatured rhodanese. Molecular simulations indicate that hard-core repulsion between the multiple DnaK molecules provides the underlying mechanism for disrupting even strong interactions within the substrate protein and preparing it for processing by downstream chaperone systems.