Treating cancer patients with anthracyclins based chemotherapeutic drugs induces congestive heart failure by a mechanism involving p53. However, it is not known how p53 aggravates the Dox-induced toxicity in the heart. Based on in vitro acute toxicity assay, using heat shock factor-1 wild type (HSF-1^+/+) and knock out (HSF-1^-/-) mouse embryonic fibroblasts and neonatal rat cardiomyocytes derived H9c2 cells, in the present work we demonstrate a novel mechanism that heat shock protein 27 (Hsp27) regulates the transcriptional activity of p53 in DOX treated cells. Inhibition of p53 by pfithrin- (PFT-) showed different magnitudes of protection from DOX, correlating to the levels of Hsp27 in these cells. In HSF-1^+/+ cells, the PFT- attenuated DOX induced toxicity. However, in HSF-1^-/- cells (which expresses very low level of Hsp27, compared to HSF-1^+/+), there was no such attenuation, indicating an important role of Hsp27 in p53 dependent cell death. On the other hand, immunoprecipitation of p53 was found to co-immunoprecipitate Hsp27 and vice versa (confirmed by both western blotting and MALDI-TOF), demonstrating the Hsp27 binding to p53 in DOX treated cells. Moreover, up-regulation of p21 was observed in HSF-1^+/+ and H9c2 cells, indicating that Hsp27 binding transactivates p53 and enhances transcription of p21 as a response to DOX treatment. Further analysis with flow cytometry showed that increased expression of p21 results in G2/M phase cell cycle arrest in DOX treated cells. Overall, the Hsp27 binding to p53 was found to attenuate the cellular toxicity by up regulation of p21 and prevents the cell death.