Defining the role of non-native interactions in directing the course of protein folding or unfolding reactions has been a difficult challenge. In particular, the extent to which such interactions play a productive role by stabilizing the structures of transition states (TSs) found on the folding and unfolding pathways of proteins is not known. On the contrary, it is thought that the TSs are expanded forms of the N state stabilized by native interactions, and it is not known whether non-native interactions can modulate TS structure. In this study of the unfolding of the SH3 domain of PI3 kinase using a microsecond mixing methodology, partial non-native structure formation is shown to occur initially during unfolding. The TS of this partial "folding during unfolding" reaction is more compact than the N state: the apparent rate constant of Trp53 burial during this reaction decreases with an increase in denaturant concentration. Kinetic studies of the unfolding of mutant variants suggest that the unusually compact TS is stabilized by interactions not present in N and that these non-native interactions are hydrophobic in nature. It was determined that mutation could be used to tune the degree of compaction in the TS.