Cells respond to stress with translational arrest, robust transcriptional changes, and transcription-independent formation of mRNP assemblies termed stress granules (SGs). Despite considerable interest in the role of SGs in oxidative, unfolded protein and viral stress responses, whether and how SGs contribute to stress-induced transcription have not been rigorously examined. To address this, we characterized transcriptional changes in Drosophila S2 cells induced by acute oxidative-stress and assessed how these were altered under conditions that disrupted SG assembly. Oxidative stress for 3 h predominantly resulted in induction or up-regulation of stress-responsive mRNAs whose levels peaked during recovery after stress cessation. The stress transcriptome is enriched in mRNAs coding for chaperones including HSP70s, small heat shock proteins, glutathione transferases, and several noncoding RNAs. Oxidative stress also induced cytoplasmic SGs that disassembled 3 h after stress cessation. As expected, RNAi-mediated knockdown of the conserved G3BP1/Rasputin protein inhibited SG assembly. However, this disruption had no significant effect on the stress-induced transcriptional response or stress-induced translational arrest. Thus SG assembly and stress-induced gene expression alterations appear to be driven by distinctive signaling processes. We suggest that while SG assembly represents a fast, transient mechanism, the transcriptional response enables a slower, longer-lasting mechanism for adaptation to and recovery from cell stress.