AAA+ unfoldases are thought to unfold substrate through the central pore of their hexameric structures, but how this process occurs is not known. VAT, the Thermoplasma acidophilum homologue of eukaryotic CDC48/p97, works in conjunction with the proteasome to degrade misfolded or damaged proteins. We show that in the presence of ATP, VAT with its regulatory N-terminal domains removed unfolds other VAT complexes as substrate. We captured images of this transient process by electron cryomicroscopy (cryo-EM) to reveal the structure of the substrate-bound intermediate. Substrate binding breaks the six-fold symmetry of the complex, allowing five of the six VAT subunits to constrict into a tight helix that grips an ~80 Å stretch of unfolded protein. The structure suggests a processive hand-over-hand unfolding mechanism, where each VAT subunit releases the substrate in turn before re-engaging further along the target protein, thereby unfolding it.