Several proteins of the mitochondrial intermembrane space are targeted by internal targeting signals. A class of such proteins with -helical hairpin structure bridged by two intramolecular disulfides is trapped by a Mia40-dependent oxidative process. Here, we describe the oxidative folding mechanism underpinning this process by an exhaustive structural characterization of the protein in all stages and as a complex with Mia40. Two consecutive induced folding steps are at the basis of the protein-trapping process. In the first one, Mia40 functions as a molecular chaperone assisting -helical folding of the internal targeting signal of the substrate. Subsequently, in a Mia40-independent manner, folding of the second substrate helix is induced by the folded targeting signal functioning as a folding scaffold. The Mia40-induced folding pathway provides a proof of principle for the general concept that internal targeting signals may operate as a folding nucleus upon compartment-specific activation.