It is unclear how stress granule (SG) formation and cellular apoptosis are coordinately regulated. MCPIP1 (monocyte chemotactic protein-induced protein 1), also known as Zc3h12a, is a critical regulator of the inflammatory response and immune homeostasis. However, the role of MCPIP1 in stress response remains unknown. Here, we report that overexpression of MCPIP1 inhibited the assembly of SGs in response to various stresses. Conversely, MCPIP1-deficient splenocytes developed more SGs even without stress. On the other hand, overexpression of MCPIP1 sensitized RAW 264.7 cells to apoptosis under stress, whereas MCPIP1-deficient cells were resistant to stress-induced apoptosis. Mutagenesis study showed that the ability of MCPIP1 to repress SG formation is dependent on its deubiquitinating activity. Consistently, MCPIP1 negatively regulated stress-induced phosphorylation of eIF2α and thus released stress-induced inhibition of protein translation. However, MCPIP1 also inhibited 15-deoxy-Δ(12,14)-prostaglandin J(2)-induced SG formation, which was reported to be independent of eIF2α phosphorylation. Taken together, these results suggest that MCPIP1 coordinates SG formation and apoptosis during cellular stress and may play a critical role in immune homeostasis and resolution of macrophage inflammation.