Heat shock protein 70 (Hsp70) is a class of molecular chaperones that assist in preventing protein misfolding and inhibits assembly of disease-causing proteins into amyloid-like aggregates during the condition of stress. Hsp70 chaperone proteins is abundantly expressed throughout the cell. Misfolding and aggregation of human islet amyloid polypeptide (hIAPP) plays an important and detrimental role in the etiopathogenesis of type 2 diabetes. Due to limited studies on the inhibition mechanism of hIAPP, we investigate the inhibitory potential of different variants of heat shock cognate 70 (Hsc70) in vitro to identify the optimum mutant length between cytotoxicity and efficacy required for inhibition of hIAPP aggregation. Even at low concentrations, Hsc70 hampers hIAPP aggregation in a dose-dependent manner. Interestingly, its ATPase activity is not essential for inhibitory effects, suggesting a mechanism of action favoring "holdase" rather than "foldase." The C-terminal substrate-binding domain, comprising of _-sandwich subdomain and the alpha-helical lid subdomain, play a crucial role in the inhibition of hIAPP aggregation by serving as target binding site and key stabilizing structure. Atomistic simulations were conducted to uncover the binding process of Hsc70 structural variants with hIAPP monomer and dimers. Simulations reveal Hsc70-_-sandwich and hIAPP monomer to form a molecular complex via increased _-sheet content and interchain hydrogen bonds. Further addition of the complete helical lid subdomain exhibited reduced hIAPP _-sheet content and maintained preferential binding to the _-strand edges along the alpha helices, namely _5-_8. Similar promising results were observed for the interaction of Hsc70 mutants with hIAPP dimer, highlighting their anti-amyloid efficacy at early the early stages of the aggregation cascade. Based on the combined in vitro and in silico studies, a comprehensive mechanism for the inhibition of hIAPP aggregation by Hsc70 chaperone is proposed. We provide insights into the structural prerequisites of Hsc70 for inhibiting hIAPP aggregation and potential strategies to enhance the anti-aggregation effects of molecular chaperones.