The in vitro refolding of hen egg-white lysozyme is studied in the presence of various osmolytes. Proline is found to prevent aggregation during protein refolding. However, other osmolytes used in this study fail to exhibit a similar property. Experimental evidence suggests that proline inhibits protein aggregation by binding to folding intermediate(s) and trapping the folding intermediate(s) into enzymatically inactive, “aggregation-insensitive” state(s). However, elimination of proline from the refolded protein mixture results in significant recovery of the bacteriolytic activity. At higher concentrations (>1.5 M), proline is shown to form loose, higher-order molecular aggregate(s). The supramolecular assembly of proline is found to possess an amphipathic character. Formation of higher-order aggregates is believed to be crucial for proline to function as a protein folding aid. In addition to its role in osmoregulation under water stress conditions, the results of this study hint at the possibility of proline behaving as a protein folding chaperone.