Heat shock protein 27 (Hsp27) is emerging as a promising therapeutic target for treatment of various cancers. Although the role of Hsp27 in protection from stress-induced intrinsic cell death has been relatively well studied, its role in Fas (death domain containing member of the tumor necrosis factor receptor superfamily)-induced apoptosis and cell proliferation remains underappreciated. Here, we show that Hsp27 silencing induces dual coordinated effects, resulting in inhibition of cell proliferation and sensitization of cells to Fas-induced apoptosis through regulation of PEA-15 (15-kDa phospho-enriched protein in astrocytes). We demonstrate that Hsp27 silencing suppresses proliferation by causing PEA-15 to bind and sequester extracellular signal-regulated kinase (ERK), resulting in reduced translocation of ERK to the nucleus. Concurrently, Hsp27 silencing promotes Fas-induced apoptosis by inducing PEA-15 to release Fas-associating protein with a novel death domain (FADD), thus allowing FADD to participate in death receptor signaling. Conversely, Hsp27 overexpression promotes cell proliferation and suppresses Fas-induced apoptosis. Furthermore, we show that Hsp27 regulation of PEA-15 activity occurs in an Akt-dependent manner. Significantly, Hsp27 silencing in a panel of phosphatase and tensin homolog on chromosome 10 (PTEN) wild-type or null cell lines, and in LNCaP cells that inducibly express PTEN, resulted in selective growth inhibition of PTEN-deficient cancer cells. These data identify a dual coordinated role of Hsp27 in cell proliferation and Fas-induced apoptosis via Akt and PEA-15, and indicate that improved clinical responses to Hsp27-targeted therapy may be achieved by stratifying patient populations based on tumor PTEN expression.