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The molecular chaperone Hsp104 plays a central role in the clearance of aggregates after heat shock and the propagation of yeast prions. Hsp104's disaggregation activity and prion propagation have been linked to its ability to resolubilize or remodel protein aggregates. However, Hsp104 has also the capacity to catalyze protein aggregation of some substrates at specific conditions. Hence, it is a molecular chaperone with two opposing activities with respect to protein aggregation. In yeast models of Huntington's disease, Hsp104 is required for the aggregation and toxicity of polyglutamine (polyQ), but the expression of Hsp104 in cellular and animal models of Huntington's and Parkinson's disease protects against polyQ and alpha-synuclein toxicity. Therefore, elucidating the molecular determinants and mechanisms underlying the ability of Hsp104 to switch between these two activities is of critical importance for understanding its function and could provide insight into novel strategies aimed at preventing or reversing the formation of toxic protein aggregation in systemic and neurodegenerative protein misfolding diseases. Here, we present an overview of the current molecular models and hypotheses that have been proposed to explain the role of Hsp104 in modulating protein aggregation and prion propagation. The experimental approaches and the evidences presented so far in relation to these models are examined. Our primary objective is to offer a critical review that will inspire the use of novel techniques and the design of new experiments to proceed towards a qualitative and quantitative understanding of the molecular mechanisms underlying the multifunctional properties of Hsp104 in vivo.