Inactivation of Hsp104 by guanidine is contended to be the mechanism by which guanidine cures yeast prions. We now find an Hsp104 mutation (D184N) that confers resistance to guanidine-curing of the yeast [PSI(+)] prion. In an independent screen we isolated an HSP104 allele altered in the same residue (D184Y) that dramatically impairs [PSI(+)] propagation in a temperature-dependent manner. Directed mutagenesis of HSP104 produced additional alleles that conferred varying degrees of resistance to guanidine-curing or impaired [PSI(+)] propagation. The mutations similarly affected propagation of the [URE3] prion. Basal and induced abundance of all mutant proteins was normal. Thermotolerance of cells expressing mutant proteins was variably resistant to guanidine, and the degree of thermotolerance did not correlate with [PSI(+)] stability. We thus show that guanidine cures yeast prions by inactivating Hsp104 and identify a highly conserved Hsp104 residue that is critical for yeast prion propagation. Our data suggest that Hsp104 activity can be reduced substantially without affecting [PSI(+)] stability, and that Hsp104 interacts differently with prion aggregates than with aggregates of thermally denatured protein.