The members of the protein inhibitor of activated STAT (PIAS) family of proteins are implicated in fundamental cellular processes, including transcriptional regulation, either through action as E3 SUMO ligases or through SUMO-independent effects. We report here the identification of FIP200 (focal adhesion kinase family-interacting protein of 200 kDa) as a new PIASy-interacting protein. We show that the interaction depends on the integrity of the RING finger of PIASy and the carboxy terminus of FIP200. Both in vitro and in vivo sumoylation assays failed to reveal any sumoylation of FIP200, suggesting that FIP200 is not a bona fide SUMO substrate. Immunofluorescence microscopy and subcellular fractionation, either upon forced PIASy expression or in the absence of PIASy, revealed that interaction with PIASy redistributes FIP200 from the cytoplasm to the nucleus, correlating with abrogation of FIP200 regulation of TSC/S6K signaling. Conversely, FIP200 enhances the transcriptional activation of the p21 promoter by PIASy whereas PIASy transcription activity is severely reduced upon FIP200 depletion by RNA interference. Chromatin immunoprecipitation analysis demonstrates that endogenous PIASy and FIP200 are corecruited to the p21 promoter. Altogether, these results provide the first evidence for the existence of a close-spatially controlled-mode of regulation of FIP200 and PIASy nucleocytoplasmic functions.