We use a host-guest approach to evaluate the effect of Trp guest residues relative to Ala on the kinetics and thermodynamics of formation of His-heme loops in the denatured state of iso-1-cytochrome c at 1.5, 3.0, and 6.0 M guanidine hydrochloride (GdnHCl). Trp guest residues are inserted into an alanine-rich segment placed after a unique His near the N-terminus of iso-1-cytochrome c. Trp guest residues are either 4 or 10 residues from the His end of the 28-residue loop. We find the guest Trp stabilizes the His-heme loop at all GdnHCl concentrations when it is the 4th, but not the 10th, residue from the His end of the loop. Thus, residues near loop ends are most important in developing topological constraints in the denatured state that affect protein folding. In 1.5 M GdnHCl, the loop stabilization is ∼0.7 kcal/mol, providing a thermodynamic rationale for the observation that Trp often mediates residual structure in the denatured state. Measurement of loop breakage rate constants, kb,His, indicates that loop stabilization by the Trp guest residues occurs completely after the transition state for loop formation in 6.0 M GdnHCl. Under poorer solvent conditions, approximately half of the stabilization of the loop develops in the transition state, consistent with contacts in the denatured state being energetically downhill and providing evidence for funneling even near the rim of the folding funnel.