Protein folding and quality control in the endoplasmic reticulum are critical processes for which our current understanding is far from complete. Here we describe the functional characterization of a new human 27.7-kDa protein (ERp27). We show that ERp27 is a two-domain protein located in the endoplasmic reticulum that is homologous to the non-catalytic b and b' domains of protein disulfide isomerase. ERp27 was shown to bind Delta-somatostatin, the standard test peptide for protein disulfide isomerase-substrate binding, and this ability was localized to the second domain of ERp27. An alignment of human ERp27 and human protein disulfide isomerase allowed for the putative identification of the peptide binding site of ERp27 indicating conservation of the location of the primary substrate binding site within the protein disulfide isomerase family. NMR studies revealed a significant conformational change in the b'-like domain of ERp27 upon substrate binding, which was not just localized to the substrate binding site. In addition, we report that ERp27 is bound by ERp57 both in vitro and in vivo by a similar mechanism by which ERp57 binds calreticulin.