We now report the formation mechanism of the thermoresponsive-type coacervate with the novel functional temperature-sensitive polymer, poly(N-isopropylacrylamide-co-2-hydroxyisopropylacrylamide) (poly(NIPAAmcoHIPAAm)), synthesized in our laboratory. The effects of introducing the hydrophilic comonomer (HIPAAm) into the copolymer chains and adding salts on the behaviors of the coacervate droplets induced in the poly( NIPAAm-co-HIPAAm) aqueous solutions were investigated. Not only the particle sizes of the coacervate droplets but also the cloud points of the copolymer solutions could be modulated by the HIPAAm content incorporated in the copolymers. Moreover, the particle sizes of the coacervate droplets were also changed by adding salts. Namely, the particle sizes increased with the decreasing HIPAAm composition and increasing NaCl concentration. In addition, the H-1 NMR and differential scanning calorimetric measurements suggested that as the HIPAAm content decreased or NaCl concentration increased, dehydration of the copolymers induced in the phase transition and/or separation became much easier. Therefore, on the basis of the findings obtained from these measurements, we determined that the particle sizes of the coacervate droplets induced in the temperature-sensitive polymers increased as the number of the water molecules, which are dissociated from the polymeric chains during the phase transition and/or separation, increased. Besides, to examine the separation of the model solutes, the aqueous two-phase separation with the coacervate droplets of poly(NIPAAm-co-HIPAAm) was carried out. The partitions of Methyl Orange as a model solute under both acidic (pH 2) and basic (pH 12) conditions were performed. The amount of Methyl Orange partitioned into the coacervate droplets at pH 12 is much greater than that at pH 2, which indicated that the coacervate droplets could recognize a slight difference in the polarity or structure between the model solutes.