Environmental variables such as pH can significantly influence the folding and stability of a protein molecule. In the present investigation, we compared the alkaline pH-induced unfolding of two homologous serine hydroxymethyltransferase from mesophilic Bacillus subtilis (bsSHMT) and thermophilic Bacillus stearothermophilus (bstSHMT) using various biophysical techniques. The thermophilic enzyme bstSHMT was found to be more resistant to alkaline denaturation compared to its mesophilic counterpart, bsSHMT. Unfolding studies using domain-swapped chimera, constructed by swapping the C-terminal domain of these two wild-type proteins, revealed that C-terminal domain plays a pivotal role in the folding, stability and subunit interaction of these proteins. Primary amino acid sequence analysis of the proteins showed that bsSHMT has six unconserved lysine residues in C-terminal domain, which are absent in bstSHMT. Chemical modification of lysine side chains resulted in stabilization of monomers, only in case of bsSHMT. Moreover, comparison between homology model of bsSHMT with the crystal structure of bstSHMT revealed that a small stretch of 11 amino acids at the end of C-terminal domain was found protruding outside the molecule as a flexible coiled structure in bsSHMT. Taken together these findings suggest that possibly the presence of these non-identical lysine moieties and a small extension of C-terminal domain may be responsible for low stability of bsSHMT under alkaline pH condition.