Organic osmolytes are known to play important role in stress protection by stabilizing macromolecules and suppressing harmful effects on functional activity. There is existence of several reports in the literature regarding their effects on structural, functional and thermodynamic aspects of many enzymes and the interaction parameters with proteins have been explored. Osmolytes are compatible with enzyme function and therefore, can be accumulated up to several millimolar concentrations. From the thermodynamic point of view, osmolyte raises mid-point of thermal denaturation (Tm) of proteins while having no significant effect on ΔGD° (free energy change at physiological condition). Unfavorable interaction with the peptide backbone due to preferential hydration is the major driving force for folding of unfolded polypeptide in presence of osmolyte. However, the thermodynamic basis of stress protection and origin of compatibility paradigm has been a debatable issue. In the present manuscript, we attempt to elaborate the origin of stress protection and compatibility paradigm of osmolytes based on the effect on thermodynamic stability of proteins. We also infer that protective effects of osmolytes on ΔGD° (of proteins) could also indicate its potential involvement in unfolded protein response and overall stress biology on macromolecular level.