The major stress protein transcription factor, heat shock factor (HSF1), is tightly regulated through a multilayered activation-deactivation process involving oligomerization, post-translational modification, and interaction with the heat shock protein (Hsp90)-containing multichaperone complex. Conditions of proteotoxic stress, such as heat shock, trigger reversible assembly of latent HSF1 monomers into DNA-binding homotrimers that bind with high affinity to cognate heat shock elements. Transactivation is a second and independently regulated function of HSF1 that is accompanied by hyperphosphorylation and appears to involve a number of signaling events. Association of HSF1 with Hsp90 chaperone complexes provides additional regulatory complexity, however, not all the co-chaperones have been identified, and the specific molecular interactions throughout the activation/deactivation pathway remain to be determined. Here we demonstrate that protein phosphatase 5 (PP5), a tetratricopeptide domain-containing component of Hsp90-steroid receptor complexes, functions as a negative modulator of HSF1 activity. Physical interactions between PP5 and HSF1-Hsp90 complexes were observed in co-immunoprecipitation and gel mobility supershift experiments. Overexpression of PP5 or activation of endogenous phosphatase activity resulted in diminished HSF1 DNA binding and transcriptional activities, and accelerated recovery. Conversely, microinjection of PP5 antibodies, or inhibition of its phosphatase activity in vivo, significantly delayed trimer disassembly after heat shock. Inhibition of PP5 activity did not activate HSF1 in unstressed cells. These results indicate that PP5 is a negative modulator of HSF1 activity.