In response to DNA damage or replication stress, the protein kinase ATR is activated and subsequently transduces genotoxic signals to cell cycle control and DNA repair machinery through phosphorylation of a number of downstream substrates. Very little is known about the molecular mechanism by which ATR is activated in response to genotoxic insults. In this report, we demonstrate that protein phosphatase 5 (PP5) is required for the ATR-mediated checkpoint activation. PP5 forms a complex with ATR in a genotoxic stress-inducible manner. Interference with the expression or the activity of PP5 leads to impairment of the ATR-mediated phosphorylation of hRad17 and Chk1 after UV or hydroxyurea treatment. Similar results are obtained in ATM-deficient cells, suggesting that the observed defect in checkpoint signaling is the consequence of impaired functional interaction between ATR and PP5. In cells exposed to UV irradiation, PP5 is required to elicit an appropriate S-phase checkpoint response. In addition, loss of PP5 leads to premature mitosis after hydroxyurea treatment. Interestingly, reduced PP5 activity exerts differential effects on the formation of intranuclear foci by ATR and replication protein A, implicating a functional role for PP5 in a specific stage of the checkpoint signaling pathway. Taken together, our results suggest that PP5 plays a critical role in the ATR-mediated checkpoint activation.