Protein aggregates are a common feature of diseased and aged cells. Membrane proteins comprise a quarter of the proteome, and yet, it is not well understood how aggregation of membrane proteins is regulated and what effects these aggregates can have on cellular health. We have determined in yeast that the derlin Dfm1 has a chaperone-like activity that influences misfolded membrane protein aggregation. We establish that this function of Dfm1 does not require recruitment of the ATPase Cdc48 and it is distinct from Dfm1's previously identified function in dislocating misfolded membrane proteins from the endoplasmic reticulum (ER) to the cytosol for degradation. Additionally, we assess the cellular impacts of misfolded membrane proteins in the absence of Dfm1 and determine that misfolded membrane proteins are toxic to cells in the absence of Dfm1 and cause disruptions to proteasomal and ubiquitin homeostasis.