Fat-specific protein 27 (FSP27), a member of the cell death-inducing DNA fragmentation factor α-like effector (Cide) family, is highly expressed in adipose tissues and is a lipid droplet (LD)-associated protein that induces the accumulation of LDs. Using a yeast two-hybrid system to examine potential interactions of FSP27 with other proteins, a direct interaction with the N-terminal region of nuclear factor of activated T cells 5 (NFAT5) was identified. NFAT5 is a transcription factor that induces osmoprotective and inflammatory genes after its translocation to the nucleus. The interaction between FSP27 and NFAT5 was confirmed by bimolecular fluorescence complementation and coimmunoprecipitation. Using immunocytochemistry, NFAT5 is detected in the cytoplasm and in the nucleus under isotonic conditions; however, overexpression of FSP27 inhibited the hypertonic-induced nuclear translocation of NFAT5. Consistent with the suppression of NFAT5 nuclear translocation, in cells transfected with a reporter construct containing the NFAT5 response element from the monocyte chemoattractant protein 1 (MCP1) promoter, FSP27 overexpression repressed hypertonic-induced luciferase activity and the expression of NFAT5 target genes. Knockdown of FSP27 in differentiated 3T3-L1 adipocytes increased the NFAT5-mediated rise in MCP1. These results suggest that FSP27 not only modulates LD homeostasis but also modulates the response to osmotic stress via a physical interaction with NFAT5 at the LD surface.