To generate a cytopathic effect, the catalytic A1 subunit of cholera toxin (CT) must be separated from the rest of the toxin. Protein disulfide isomerase (PDI) is thought to mediate CT disassembly by acting as a redox-driven chaperone that actively unfolds the CTA1 subunit. Here, we show that PDI itself unfolds upon contact with CTA1. The substrate-induced unfolding of PDI provides a novel molecular mechanism for holotoxin disassembly: we postulate the expanded hydrodynamic radius of unfolded PDI acts as a wedge to dislodge reduced CTA1 from its holotoxin. The oxidoreductase activity of PDI was not required for CT disassembly, but CTA1 displacement did not occur when PDI was locked in a folded conformation or when its substrate-induced unfolding was blocked due to the loss of chaperone function. Two other oxidoreductases (ERp57 and ERp72) did not unfold in the presence of CTA1 and did not displace reduced CTA1 from its holotoxin. Our data establish a new functional property of PDI that may be linked to its role as a chaperone that prevents protein aggregation.