Disaggregation of amyloid fibrils is a fundamental biological process required for amyloid propagation. However, due to the lack of experimental systems, the molecular mechanism of how amyloid is disaggregated by cellular factors remains poorly understood. Here, we established a robust in vitro reconstituted system of yeast prion propagation and found that heat-shock protein 104 (Hsp104), Ssa1 and Sis1 chaperones are essential for efficient disaggregation of Sup35 amyloid. Real-time imaging of single-molecule fluorescence coupled with the reconstitution system revealed that amyloid disaggregation is achieved by ordered, timely binding of the chaperones to amyloid. Remarkably, we uncovered two distinct prion strain conformation-dependent modes of disaggregation, fragmentation and dissolution. We characterized distinct chaperone dynamics in each mode and found that transient, repeated binding of Hsp104 to the same site of amyloid results in fragmentation. These findings provide a physical foundation for otherwise puzzling in vivo observations and for therapeutic development for amyloid-associated neurodegenerative diseases.