The Hsp70 system is a central hub of chaperone activity in all domains of life. Hsp70 performs a plethora of tasks, including folding assistance, protection against aggregation, protein trafficking, and enzyme activity regulation, and interacts with non-folded chains, as well as near-native, misfolded, and aggregated proteins. Hsp70 is thought to achieve its many physiological roles by binding peptide segments that extend from these different protein conformers within a groove that can be covered by an ATP-driven helical lid. However, it has been difficult to test directly how Hsp70 interacts with protein substrates in different stages of folding and how it affects their structure. Moreover, recent indications of diverse lid conformations in Hsp70-substrate complexes raise the possibility of additional interaction mechanisms. Addressing these issues is technically challenging, given the conformational dynamics of both chaperone and client, the transient nature of their interaction, and the involvement of co-chaperones and the ATP hydrolysis cycle. Here, using optical tweezers, we show that the bacterial Hsp70 homologue (DnaK) binds and stabilizes not only extended peptide segments, but also partially folded and near-native protein structures. The Hsp70 lid and groove act synergistically when stabilizing folded structures: stabilization is abolished when the lid is truncated and less efficient when the groove is mutated. The diversity of binding modes has important consequences: Hsp70 can both stabilize and destabilize folded structures, in a nucleotide-regulated manner; like Hsp90 and GroEL, Hsp70 can affect the late stages of protein folding; and Hsp70 can suppress aggregation by protecting partially folded structures as well as unfolded protein chains. Overall, these findings in the DnaK system indicate an extension of the Hsp70 canonical model that potentially affects a wide range of physiological roles of the Hsp70 system.