The ubiquitin–proteasome system catalyses the immediate destruction of misfolded or impaired proteins generated in cells, but how this proteolytic machinery recognizes abnormality of cellular proteins for selective elimination remains elusive. Here, we report that the C‐terminus of Hsc70‐interacting protein (CHIP) with a U‐box domain is an E3 ubiquitin‐ligase collaborating with molecular chaperones Hsp90 and Hsc70. Thermally denatured firefly luciferase was multiubiquitylated by CHIP in the presence of E1 and E2 (Ubc4 or UbcH5c) in vitro, only when the unfolded substrate was captured by Hsp90 or Hsc70 and Hsp40. No ubiquitylating activity was detected in CHIP lacking the U‐box region. CHIP efficiently ubiquitylated denatured luciferase trapped by the C‐terminal region of Hsp90, which contains a CHIP binding site. CHIP also showed self‐ubiquitylating activity independent of target ubiquitylation. Our results indicate that CHIP can be regarded as ‘a quality‐control E3’that selectively ubiquitylates unfolded protein (s) by collaborating with molecular chaperones.