The Hsp70 (70kDa heat shock protein) is highly conserved in all species and has been implicated in a variety of important cellular functions such as heat shock response, prion propagation, protein folding and refolding, translocation across membranes and assembly of macromolecular complexes. A variety of evidence has accumulated to show that Hsp70 machinery is a key modulator of the stress response, such as heat shock and oxidant stress. Moreover, many human neurodegenerative diseases such as Alzheimer’s, Parkinson’s and the prion disease Creutzfeldt-Jacob Disease (CJD) are also intimately linked to Hsp70. Structurally, Hsp70 is comprised of two domains: nucleotide-binding domain (NBD) and substrate-binding domain (SBD). In this work, a well-established yeast system and a combination of computational biology, genetics, structural biology, biochemistry and molecular biology were utilized to decipher the role of the SBD of Hsp70 in regulation of heat shock response and [PSI+] prion propagation. It was found that mutations (F475S and L483W) located in a region termed β6-β7 dramatically decreased the stability of the SBD and the size of side chain contributes to maintain the hydrophobic core of SBD. Introduction of smaller amino acid side chains at residue 475, such as alanine and serine, resulted in temperature sensitivity and [PSI+] impairment. When the side chain of residue 475 is larger than Cysteine, no matter if it is polar or nonpolar (tyrosine and phenylalanine), thermotolerance and [PSI+] can be maintained. However, there is a limit to side-chain size as too large, such as tryptophan, Ssa1 will lose intrinsic function and fail to support cell viability. By contrast, residue 483 prefer to smaller size amino acid to remain the hydrophobic core of SBD. Therefore, mutations on those two residues easily disturb the integrity of SBD and thus promote the degradation of SBD in vitro and in vivo. Inter-domain communication between the NBD and SBD is affected through disruption of the important hydrophobic core and disturbance of a critical interface between the two domains. Disruption of the SBD structure abolishes repression of ATP hydrolysis of the NBD, reduces protein refolding activity and alters interactions with co-chaperones, especially Hsp104 and Hsp26, but decreased the interactions with Sup35. Degradation of the SBD in vivo is dependent on the action of vacuolar carboxypeptidase (Pep4) rather than the proteasome and occurs in WT cells at high temperature. Finally, SBD degradation is negatively regulated by the acetylation of four reversible hyperacetylated lysine residues, K86, K185, K354 and K562 of Ssa1. And, the thermotolerance regulation is independent from [PSI+] prion and alteration of the genome-wide translation caused by the read-through. The reversible hyperacetylated residues did not influence the basal expression level of the Hsp70 machinery, but rapidly respond the heat-shock stress by deacetylating themselves to stabilize SBD of Hsp70.