Proteins perform their functions in cells where macromolecular solutes reach concentrations of >300 g/L and occupy >30% of the volume. The volume excluded by these macromolecules stabilizes globular proteins because the native state occupies less space than the denatured state. Theory predicts that crowding can increase the ratio of folded to unfolded protein by a factor of 100, amounting to 3 kcal/mol of stabilization at room temperature. We tested the idea that volume exclusion dominates the crowding effect in cells using a variant of protein L, a 7 kDa globular protein with seven lysine residues replaced by glutamic acids; 84% of the variant molecules populate the denatured state in dilute buffer at room temperature, compared with 0.1% for the wild-type protein. We then used in-cell NMR spectroscopy to show that the cytoplasm of Escherichia coil does not overcome even this modest (similar to 1 kcal/mol) free-energy deficit. The data are consistent with the idea that nonspecific interactions between cytoplasmic components can overcome the excluded-volume effect. Evidence for these interactions is provided by the observations that adding simple salts folds the variant in dilute solution but increasing the salt concentration inside E. coli does not fold the protein. Our data are consistent with the results of other studies of protein stability in cells and suggest that stabilizing excluded-volume effects, which must be present under crowded conditions, can be ameliorated by nonspecific interactions between cytoplasmic components.