diff --git a/devstack/files/kafka/kafka.service b/devstack/files/kafka/kafka.service
index 11600914b..9b311704d 100644
--- a/devstack/files/kafka/kafka.service
+++ b/devstack/files/kafka/kafka.service
@@ -21,6 +21,7 @@ After=network.target zookeeper.service
 User=kafka
 Group=kafka
 LimitNOFILE=32768:32768
+Environment="LOG_DIR=/var/log/kafka"
 Environment="KAFKA_HEAP_OPTS=-Xmx128m"
 ExecStart=/opt/kafka/bin/kafka-server-start.sh /etc/kafka/server.properties
 Restart=on-failure
diff --git a/devstack/files/kafka/server.properties b/devstack/files/kafka/server.properties
index 4fb200ad1..ceada6cb6 100644
--- a/devstack/files/kafka/server.properties
+++ b/devstack/files/kafka/server.properties
@@ -63,6 +63,13 @@ auto.create.topics.enable=false
 # for consumption, but also mean more files.
 num.partitions=2
 
+# Specify the message format version the broker will use to append messages to
+# the logs. Once consumers are upgraded, one can change the message format and
+# enjoy the new message format that includes new timestamp and improved
+# compression.
+# (TODO) Use new message format after updating consumers
+log.message.format.version=0.9.0.0
+
 ############################# Log Flush Policy #############################
 
 # Messages are immediately written to the filesystem but by default we only fsync() to sync
@@ -119,4 +126,3 @@ zookeeper.connection.timeout.ms=1000000
 
 #kafka delete will have no impact if this is not set true
 delete.topic.enable=true
-
diff --git a/devstack/settings b/devstack/settings
index 868bbaac2..6666a7167 100644
--- a/devstack/settings
+++ b/devstack/settings
@@ -103,7 +103,7 @@ INFLUXDB_PYTHON_VERSION=${INFLUXDB_PYTHON_VERSION:-1.3.8}
 VERTICA_VERSION=${VERTICA_VERSION:-8.0.0-0}
 CASSANDRA_VERSION=${CASSANDRA_VERSION:-311x}
 # Kafka deb consists of the version of scala plus the version of kafka
-BASE_KAFKA_VERSION=${BASE_KAFKA_VERSION:-0.9.0.1}
+BASE_KAFKA_VERSION=${BASE_KAFKA_VERSION:-1.0.1}
 SCALA_VERSION=${SCALA_VERSION:-2.11}
 KAFKA_VERSION=${KAFKA_VERSION:-${SCALA_VERSION}-${BASE_KAFKA_VERSION}}
 STORM_VERSION=${STORM_VERSION:-1.1.1}
diff --git a/releasenotes/notes/apache-kafka-101-d5f3454fd445c727.yaml b/releasenotes/notes/apache-kafka-101-d5f3454fd445c727.yaml
new file mode 100644
index 000000000..d772afb36
--- /dev/null
+++ b/releasenotes/notes/apache-kafka-101-d5f3454fd445c727.yaml
@@ -0,0 +1,7 @@
+---
+upgrade:
+  - |
+    Apache Kafka has been upgraded to version 1.0.1 in devstack. It is the
+    recommended version for Monasca. Because of existing old consumers, Kafka
+    log message format option `log.message.format.version` should be set to
+    0.9.0.