Protein phosphatase 5 (Ppp5), a tetratricopeptide repeat domain protein, has been implicated in multiple cellular functions, including cellular proliferation, migration, differentiation and survival, and cell cycle checkpoint regulation via the ataxia telangiectasia mutated/ATM and Rad3-related (ATM/ATR) signal pathway. However, the physiological functions of Ppp5 have not been reported. To confirm the role of Ppp5 in cell cycle checkpoint regulation, we generated Ppp5-deficient mice and isolated mouse embryonic fibroblast (MEF) cells from Ppp5-deficient and littermate control embryos. Although Ppp5-deficient mice can survive through embryonic development and postnatal life and MEF cells from the Ppp5-deficient mice maintain normal replication checkpoint induced by hydroxyurea, Ppp5-deficient MEF cells display a significant defect in G(2)/M DNA damage checkpoint in response to ionizing radiation (IR). To determine whether this defect in IR-induced G(2)/M checkpoint is due to altered ATM-mediated signaling, we measured ATM kinase activity and ATM-mediated downstream events. Our data demonstrated that IR-induced ATM kinase activity is attenuated in Ppp5-deficient MEFs. Phosphorylation levels of two known ATM substrates, Rad17 and Chk2, were significantly reduced in Ppp5-deficient MEFs in response to IR. Furthermore, DNA damage-induced Rad17 nuclear foci were dramatically reduced in Ppp5-deficient MEFs. These results demonstrate a direct regulatory linkage between Ppp5 and activation of the ATM-mediated G(2)/M DNA damage checkpoint pathway in vivo.