The cylindrical chaperonin GroEL and its lid-shaped cofactor GroES of E. coli have an essential role in assisting protein folding by transiently encapsulating non-native substrate in an ATP-regulated mechanism. It remains controversial, whether the chaperonin system functions solely as an infinite dilution chamber, preventing off-pathway aggregation, or actively enhances folding kinetics by modulating the folding energy landscape. Here we developed single molecule approaches to distinguish between passive and active chaperonin mechanisms. Using low protein concentrations (100 pM) to exclude aggregation, we measured the spontaneous and GroEL/ES-assisted folding of double mutant maltose binding protein (DM-MBP) by single-pair fluorescence resonance energy transfer and fluorescence correlation spectroscopy. We find that GroEL/ES accelerates DM-MBP folding up to 8-fold over the spontaneous folding rate. Accelerated folding is achieved by encapsulation of folding intermediate in the GroEL/ES-cage, independent of repetitive cycles of protein binding and release from GroEL. Moreover, photoinduced electron transfer experiments provided direct physical evidence that the confining environment of the chaperonin restricts polypeptide chain dynamics. This effect is mediated by the net-negatively charged wall of the GroEL/ES cavity, as shown using the GroEL mutant EL(KKK2) in which the net-negative charge is removed. EL(KKK2)/ES functions as a passive cage in which folding occurs at the slow spontaneous rate. Taken together our findings suggest that protein encapsulation can accelerate folding by entropically destabilizing folding intermediates, in strong support of an active chaperonin mechanism in the folding of some proteins. Accelerated folding is biologically significant as it adjusts folding rates relative to the speed of protein synthesis.