As the nascent polypeptide chain is being synthesized, it passes through a tunnel within the large ribosomal subunit and emerges at the solvent side where protein folding occurs. Despite the universality and conservation of dimensions of the ribosomal tunnel, a functional role for the ribosomal tunnel is only beginning to emerge: Rather than a passive conduit for the nascent chain, accumulating evidence indicates that the tunnel plays a more active role. In this article, we discuss recent structural insights into the role of the tunnel environment, and its implications for protein folding, co-translational targeting and translation regulation.