The short answer is that Hashem means “The Name” in Hebrew. When reading the Torah or praying, Jews who come across the name of God (transliterated into English as YHWH) will substitute the word Adonai. In other contexts and in casual conversation, Jews who encounter God’s name will substitute Hashem instead.
Exodus 20:7 reads, “You shall not misuse the name of the LORD your God, for the LORD will not hold anyone guiltless who misuses his name” (cf. Deuteronomy 5:11). This command in Scripture is the reason that Jews use Hashem in place of YHWH. The word translated “misuse” carries the idea of speaking (or writing) the name of God in an “empty,” “worthless” manner. Observant Jews are concerned about potentially blaspheming God by misusing His name. According to one Jewish tradition, a person who says God’s name while in a state of sinful impurity is in danger of death The rabbi Rashi taught that God allowed His name to be pronounced “only in the place to which the Shechinah comes, and that is in the Temple in Jerusalem. There permission was given to the priests to mention the Explicit Name when they raise their hands to bless the people” (from Mechilta, Sifrei, Num. 6:23, Sotah 38a).
Leviticus 22:32 warns that the holy name of God shall not be profaned, and the Talmud equates such blasphemy with paganism. But the Mishnah takes things further by stating, “Whoever profanes the name of Heaven in secret will pay the penalty in public” (Avot 4:4). Some traditional authorities counter that there is no such thing as blaspheming God’s name in secret, because He can see everything. Nothing is “secret” to Him.
The question arises, is the use of God’s name Yahweh, or Jehovah, wrong? Is it blasphemy to speak that name, or should we use the epithet Hashem as a substitute? The answer is that there is no biblical reason to use Hashem in the place of God’s name. No passage in Scripture instructs us not to use His name. In fact, if God didn’t want us to use His name, He wouldn’t have given it to us.
We are mindful of how frequently the world uses words, including God’s name, that do profane what is holy, and we are saddened. As followers of Christ, we seek to hallow God’s name and never use it in an empty, careless, or unworthy manner.