Folding of newly synthesized protein occurs in endoplasmic reticulum (ER) and is assisted by chaperone molecules. In ER stress conditions, misfolded proteins are enriched in a lumen of ER perturbing its normal function, which triggers cellular self-defense mechanism, the unfolded protein response (UPR). It was reported that tunicamycin-induced ER stress can be modulated with high concentration of chemicals such as 4-phenylbutyric acid and salicylate. In search of assay systems to identify such compounds, we have developed a cell-based reporter assay where renilla luciferase activity is driven by glucose-regulated protein 78 (GRP78) promoter. Using our reporter assay, we have screened chemical libraries and found that hydroxynaphthoic acids, especially 1-, 3-, and 6-hydroxy-2-naphthoic acids, potently decrease the ER stress signal, showing an order of magnitude better activity than salicylate. UPR markers such as GRP78, C/EBP homology protein (CHOP) and phosphorylated protein kinase RNA-activated (PKR)-like ER kinase (PERK) were significantly down-regulated with hydroxynaphthoic acids in western blot. Among the analogues, 1-hydroxy-2-naphthoic acid was the most potent in down-regulating those UPR markers. Further, both phosphorylated inositol-requiring enzyme 1α (IRE1α) and spliced form of X-box binding protein 1 (XBP1) were decreased in the protein and the mRNA level, implying both PERK and IRE1α branches in UPR mechanism are controlled with hydroxynaphthoic acids. Taken together, it was suggested that hydroxynaphthoic acids exert their ER stress-reducing activity prior to the UPR activation as chemical chaperones do. In summary, we report a cell-based assay system for the screening of ER stress-reducing compounds and hydroxynaphthoic acids as novel series of chemical chaperones.