Xanthohumol (XN) and demethylxanthohumol (DMX) are specialized prenylated chalconoids with multiple pharmaceutical applications that accumulate to high levels in the glandular trichomes of hop (Humulus lupulus L.). Although all structural enzymes in the XN pathway have been functionally identified, biochemical mechanisms underlying highly efficient production of XN have not been fully resolved. In this study, we characterized two non-catalytic chalcone isomerase-like proteins (designated as HlCHIL1 and HlCHIL2) using engineered yeast harboring all genes required for DMX production. HlCHIL2 increased DMX production by 2.3-fold, whereas HlCHIL1 significantly decreased DMX production by 30%. We show that CHIL2 is part of an active DMX biosynthetic metabolon in hop glandular trichomes that encompasses a chalcone synthase (CHS) and a membrane-bound prenyltransferase (PT), and that type IV CHI-fold proteins of representative land plants contain conserved function to bind with CHS and enhance its activity. Binding assays and structural docking uncover a novel function of HlCHIL1 to bind DMX and naringenin chalcone (NC) to stabilize the ring-open configuration of these chalconoids. This study reveals the role of two HlCHILs in DMX biosynthesis in hops, and provides insight into their evolutionary development from the ancestral fatty acid-binding CHI-fold proteins to specialized auxiliary proteins supporting flavonoid biosynthesis in plants.