Induction of molecular chaperones is the characteristic protective response to environmental stress, and is regulated by a transcriptional program that depends on heat shock factor 1 (HSF1), which is normally under negative regulatory control by molecular chaperones Hsp70 and Hsp90. In metazoan species, the chaperone system also provides protection against apoptosis. We demonstrate that the dual function co-chaperone/ubiquitin ligase CHIP (C-terminus of Hsp70-interacting protein) regulates activation of the stress-chaperone response through induced trimerization and transcriptional activation of HSF1, and is required for protection against stress-induced apoptosis in murine fibroblasts. The consequences of this function are demonstrated by the phenotype of mice lacking CHIP, which develop normally but are temperature-sensitive and develop apoptosis in multiple organs after environmental challenge. CHIP exerts a central and unique role in tuning the response to stress at multiple levels by regulation of protein quality control and transcriptional activation of stress response signaling.