The newly synthesized proSP-C (surfactant protein C precursor) is an integral ER (endoplasmic reticulum) membrane protein with a single metastable polyvaline alpha-helical transmembrane domain that comprises two-thirds of the mature peptide. More than 20 mutations in the ER-lumenal CTC (C-terminal domain of proSP-C), are associated with ILD (interstitial lung disease), and some of the mutations cause intracellular accumulation of cytotoxic protein aggregates and a corresponding decrease in mature SP-C. In the present study, we showed that: (i) human embryonic kidney cells expressing the ILD-associated mutants proSP-C(L188Q) and proSP-C(DeltaExon4) accumulate Congo Red-positive amyloid-like inclusions, whereas cells transfected with the mutant proSP-C(I73T) do not; (ii) transfection of CTC into cells expressing proSP-C(L188Q) results in a stable CTC-proSP-C(L188Q) complex, increased proSP-C(L188Q) half-life and reduced formation of Congo Red-positive deposits; (iii) replacement of the metastable polyvaline transmembrane segment with a stable polyleucine transmembrane segment likewise prevents formation of amyloid-like proSP-C(L188Q) aggregates; and (iv) binding of recombinant CTC to non-helical SP-C blocks SP-C amyloid fibril formation. These results suggest that CTC can prevent the polyvaline segment of proSP-C from promoting formation of amyloid-like deposits during biosynthesis, by binding to non-helical conformations. Mutations in the Brichos domain of proSP-C may lead to ILD via loss of CTC chaperone function.