The endoplasmic reticulum (ER) is a major protein folding compartment for secreted, plasma membrane and organelle proteins. Each of these newly-synthesized polypeptides folds in a deterministic process, affected by the unique conditions that exist in the ER. An understanding of protein folding in the ER is a fundamental biomolecular challenge at two levels. The first level addresses how the amino acid sequence programs that polypeptide to efficiently arrive at a particular fold out of a multitude of alternatives, and how different sequences obtain similar folds. At the second level are the issues introduced by folding not in the cytosol, but in the ER, including the risk of aggregation in a molecularly crowded environment, accommodation of post-translational modifications and the compatibility with subsequent intracellular trafficking. This review discusses both the physicochemical and cell biological constraints of folding, which are the challenges that the ER molecular chaperones help overcome.