An outcome of overloading of the endoplasmic reticulum (ER) folding machinery is a perturbation in ER function and the formation of intracellular aggregates. The latter is a key pathogenic factor in numerous diseases known as ER storage diseases. Here, we report that heterologous overexpression of the green fluorescent protein-tagged iodide transporter pendrin (GFP-PDS) perturbs folding and degradation processes in the ER. Pendrin (PDS) is a chloride-iodide transporter found in thyroid cells. Mutations in PDS can cause its retention in the ER and are associated with Pendred syndrome. Biochemical and live-cell analyses demonstrated that wild-type GFP-PDS is predominantly retained in perinuclear aggregates and in ER membranes, causing their collapse and vesiculation. Inhibition of protein synthesis by cycloheximide (CHX) or puromycin caused dissociation of the GFP-PDS aggregates and returned the ER to its normal reticular morphology. Blocking protein synthesis promoted folding and export of ER-retained GFP-PDS, as demonstrated by surface-biotinylation analysis and by CHX- or puromycin-induced accumulation of YFP-PDS in the Golgi apparatus during a 20°C temperature-block experiment. The chemical chaperone trimethylamine-N-oxide (TMAO) also reversed the GFP-PDS-mediated ER collapse and vesiculation, suggesting that exposed hydrophobic stretches of misfolded or aggregated GFP-PDS may contribute to ER retention. These data suggest that GFP-PDS is a slow-folding protein with a propensity to form aggregates when overexpressed. Thus, we describe a system for the reversible induction of ER stress that is based entirely on the heterologous overexpression of GFP-PDS.