Small heat-shock proteins (Hsps) are ubiquitous molecular chaperones which prevent the unspecific aggregation of non-native proteins. For Hsp26, a cytosolic sHsp from of Saccharomyces cerevisiae, it has been shown that, at elevated temperatures, the 24 subunit complex dissociates into dimers. This dissociation is required for the efficient interaction with non-native proteins. Deletion analysis of the protein showed that the N-terminal half of Hsp26 (amino acid residues 1-95) is required for the assembly of the oligomer. Limited proteolysis in combination with mass spectrometry suggested that this region can be divided in two parts, an N-terminal segment including amino acid residues 1-30 and a second part ranging from residues 31-95. To analyze the structure and function of the N-terminal part of Hsp26 we created a deletion mutant lacking amino acid residues 1-30. We show that the oligomeric state and the structure, as determined by size exclusion chromatography and electron microscopy, corresponds to that of the Hsp26 wild-type protein. Furthermore, this truncated version of Hsp26 is active as a chaperone. However, in contrast to full length Hsp26, the truncated version dissociates at lower temperatures and complexes with non-native proteins are less stable than those found with wild-type Hsp26. Our results suggest that the N-terminal segment of Hsp26 is involved in both, oligomerization and chaperone function and that the second part of the N-terminal region (amino acid residues 31-95) is essential for both functions.