The molecular chaperone GRP78/BiP is a key regulator of protein folding in the endoplasmic reticulum, and it plays a pivotal role in cancer cell survival and chemoresistance. Inhibition of its function has therefore been an important strategy for inhibiting tumor cell growth in cancer therapy. Previous efforts to achieve this goal have used peptides that bind to GRP78/BiP conjugated to pro-drugs or cell-death-inducing sequences. Here, we describe a peptide that induces prostate tumor cell death without the need of any conjugating sequences. This peptide is a sequence derived from the cochaperone Bag-1. We have shown that this sequence interacts with and inhibits the refolding activity of GRP78/BiP. Furthermore, we have demonstrated that it modulates the unfolded protein response in ER stress resulting in PARP and caspase-4 cleavage. Prostate cancer cells stably expressing this peptide showed reduced growth and increased apoptosis in in vivo xenograft tumor models. Amino acid substitutions that destroyed binding of the Bag-1 peptide to GRP78/BiP or downregulation of the expression of GRP78 compromised the inhibitory effect of this peptide. This sequence therefore represents a candidate lead peptide for anti-tumor therapy.