The endoplasmic reticulum (ER) regulates essential cellular processes, including protein folding, lipid synthesis, and calcium homeostasis. The ER homeostasis is maintained by a conserved set of signaling cascades called the Unfolded Protein Response (UPR). How the UPR senses perturbations in ER homeostasis has been the subject of active research for decades. In metazoans, the UPR consists of three ER-membrane embedded sensors: IRE1, PERK and ATF6. These sensors detect the accumulation of misfolded proteins in the ER lumen and adjust protein folding capacity according to cellular needs. Early work revealed that the ER-resident chaperone BiP binds to all three UPR sensors in higher eukaryotes and BiP binding was suggested to regulate their activity. More recent data have shown that in higher eukaryotes the interaction of the UPR sensors with a complex network of chaperones and misfolded proteins modulates their activation and deactivation dynamics. Furthermore, emerging evidence suggests that the UPR monitors ER membrane integrity beyond protein folding defects. However, the mechanistic and structural basis of UPR activation by proteotoxic and lipid bilayer stress in higher eukaryotes remains only partially understood. Here, we review the current understanding of novel protein interaction networks and the contribution of the lipid membrane environment to UPR activation.