Small heat shock proteins (sHsps) are an evolutionary conserved class of ATP‐independent chaperones that protect cells against proteotoxic stress. sHsps form assemblies with aggregation‐prone misfolded proteins, which facilitates subsequent substrate solubilization and refolding by ATP‐dependent Hsp70 and Hsp100 chaperones. Substrate solubilization requires disruption of sHsp association with trapped misfolded proteins. Here, we unravel a specific interplay between Hsp70 and sHsps at the initial step of the solubilization process. We show that Hsp70 displaces surface‐bound sHsps from sHsp–substrate assemblies. This Hsp70 activity is unique among chaperones and highly sensitive to alterations in Hsp70 concentrations. The Hsp70 activity is reflected in the organization of sHsp–substrate assemblies, including an outer dynamic sHsp shell that is removed by Hsp70 and a stable core comprised mainly of aggregated substrates. Binding of Hsp70 to the sHsp/substrate core protects the core from aggregation and directs sequestered substrates towards refolding pathway. The sHsp/Hsp70 interplay has major impact on protein homeostasis as it sensitizes substrate release towards cellular Hsp70 availability ensuring efficient refolding of damaged proteins under favourable folding conditions.