Hydrophobic interactions play a major role in binding non-native substrate proteins in the central cavity of the bacterial chaperonin GroEL. The sequence of local conformational changes by which GroEL and its cofactor GroES assist protein folding can be explored using the polarity-sensitive fluorescence probe Nile Red. A specific single-cysteine mutant of GroEL (Cys261), whose cysteine is located inside the central cavity at the apical region of the protein, was covalently labeled with synthetically prepared Nile Red maleimide (NR). Bulk fluorescence spectra of Cys261-NR were measured to examine the effects of binding of the stringent substrate, malate dehydrogenase (MDH), GroES, and nucleotide on the local environment of the probe. After binding denatured substrate, the fluorescence intensity increased by 32 +/- 7%, suggesting enhanced hydrophobicity at the position of the label. On the other hand, in the presence of ATP, the fluorescence intensity decreased by 13 +/- 3%, implying increased local polarity. To explore the sequence of local polarity changes, substrate, GroES, and various nucleotides were added in different orders: the resulting changes in emission intensity provide insight into the sequence of conformational changes occurrine, during GroEL-mediated protein folding.