The cellular response to stresses such as heat shock involves changes in gene expression. It is well known that the splicing of messenger RNA precursors is generally repressed on heat shock, but the factors responsible have not been identified. SRp38 is an SR protein splicing factor that functions as a general repressor of splicing. It is activated by dephosphorylation and required for splicing repression in M-phase cells. Here we show that SRp38 is also dephosphorylated on heat shock and that this dephosphorylation correlates with splicing inhibition. Notably, depletion of SRp38 from heat-shocked cell extracts derepresses splicing, and adding back dephosphorylated SRp38 specifically restores inhibition. We further show that dephosphorylated SRp38 interacts with a U1 small nuclear ribonucleoprotein particle (snRNP) protein, and that this interaction interferes with 5'-splice-site recognition by the U1 snRNP. Finally, SRp38-deficient DT40 cells show an altered cell-cycle profile consistent with a mitotic defect; they are also temperature sensitive and defective in recovery after heat shock. SRp38 thus plays a crucial role in cell survival under stress conditions by inhibiting the splicing machinery.