The endoplasmic reticulum of the budding yeast S. cerevisiae contains a well-characterized, essential member of the Hsp70 family of molecular chaperones, Kar2p. Kar2p is involved in translocation of proteins into the ER as well as the proper folding of proteins in that compartment. We report the characterization of a novel Hsp70 homolog of the ER, Ssi1p. Ssi1p, which shares 24% of the amino acids of Kar2p, is not essential for growth under normal conditions. However, deletion of SSI1 results in slight cold sensitivity as well as an enhanced resistance to manganese. The SSI1 promoter contains an element with similarity to the unfolded protein response element (UPR) of KAR2. Like KAR2, SSI1 is induced both in the presence of tunicamycin and in a kar2-159 mutant strain, conditions which lead to an accumulation of unfolded proteins in the ER. Unlike KAR2, however, SSI1 is not induced by heat shock. Deletion of SSI1 shows a complex pattern of genetic interactions with various conditional alleles of KAR2, ranging from synthetic lethality to synthetic rescue. Interestingly, SSI1 deletion strains show a partial block in translocation of at least one secretory protein into the endoplasmic reticulum, suggesting that Ssi1p may play a direct role in the translocation process.