Guanidinium chloride (GdmCl) is a widely used chemical denaturant that unfolds proteins. Its effects on hydrophobic interactions are, however, not fully understood. We quantify the effects of GdmCl on various manifestations of hydrophobicity--from solvation and interactions of small solutes to folding-unfolding of hydrophobic polymers--in water and in concentrated GdmCl solutions. For comparison, we also perform similar calculations in solutions of NaCl and CsCl in water. Like NaCl and CsCl, GdmCl increases the surface tension of water, decreases the solubility of small hydrophobic solutes, and enhances the strength of hydrophobic interactions at the pair level. However, unlike NaCl and CsCl, GdmCl destabilizes folded states of hydrophobic polymers. We show that Gdm(+) ions preferentially coat the hydrophobic polymer, and it is the direct van der Waals interaction between Gdm(+) ions and the polymer that contributes to the destabilization of folded states. Interestingly, the temperature dependence of the free energy of unfolding of the hydrophobic polymer in water is protein-like, with signatures of both heat and cold denaturation. Addition of GdmCl shifts the cold denaturation temperature higher, into the experimentally accessible region. Finally, translational as well as conformational dynamics of the polymer are slower in GdmCl and correlate with dynamics of water molecules in solution.