Several metals and metalloids profoundly affect biological systems, but their impact on the proteome and mechanisms of toxicity are not fully understood. Here, we demonstrate that arsenite causes protein aggregation in Saccharomyces cerevisiae. Various molecular chaperones were found to be associated with arsenite-induced aggregates indicating that this metalloid promotes protein misfolding. Using in vivo and in vitro assays, we show that proteins in the process of synthesis/folding are particularly sensitive to arsenite-induced aggregation, that arsenite interferes with protein folding by acting on unfolded polypeptides, and that arsenite directly inhibits chaperone activity. Thus, folding inhibition contributes to arsenite toxicity in two ways: by aggregate formation and by chaperone inhibition. Importantly, arsenite-induced protein aggregates can act as seeds committing other, labile proteins to misfold and aggregate. Our findings describe a novel mechanism of toxicity that may explain the suggested role of this metalloid in the etiology and pathogenesis of protein folding disorders associated with arsenic poisoning.