The evolutionary diversity of the HSP70 gene family at the genetic level has generated complex structural variations leading to altered functional specificity and mode of regulation in different cellular compartments. By utilizing Saccharomyces cerevisiae as a model system for better understanding the global functional cooperativity between Hsp70 paralogs, we have dissected the differences in functional properties at the biochemical level between mitochondrial heat shock protein 70 (mtHsp70) Ssc1 and an uncharacterized Ssc3 paralog. Based on the evolutionary origin of Ssc3 and a high degree of sequence homology with Ssc1, it has been proposed that both have a close functional overlap in the mitochondrial matrix. Surprisingly, our results demonstrate that there is no functional cross-talk between Ssc1 and Ssc3 paralogs. The lack of in vivo functional overlap is due to altered conformation and significant lower stability associated with Ssc3. The substrate-binding domain of Ssc3 showed poor affinity toward mitochondrial client proteins and Tim44 due to the open conformation in ADP-bound state. In addition to that, the nucleotide-binding domain of Ssc3 showed an altered regulation by the Mge1 co-chaperone due to a high degree of conformational plasticity, which strongly promotes aggregation. Besides, Ssc3 possesses a dysfunctional inter-domain interface thus rendering it unable to perform functions similar to generic Hsp70s. Moreover, we have identified the critical amino acid sequence of Ssc1 and Ssc3 that can "make or break" mtHsp70 chaperone function. Together, our analysis provides the first evidence to show that the nucleotide-binding domain of mtHsp70s plays a critical role in determining the functional specificity among paralogs and orthologs across kingdoms.