The inability of cells to adapt to increased environmental tonicity can lead to inflammatory gene expression and pathogenesis. The Rel family of transcription factors TonEBP and NF-κB p65 play critical roles in the switch from osmoadaptive homeostasis to inflammation, respectively. Here we identified PACT-mediated PKR kinase activation as a marker of the termination of adaptation and initiation of inflammation in Mus musculus embryonic fibroblasts. We found that high stress-induced PACT-PKR activation inhibits the interaction between NF-κB c-Rel and TonEBP essential for the increased expression of TonEBP-dependent osmoprotective genes. This resulted in enhanced formation of TonEBP/NF-κB p65 complexes and enhanced proinflammatory gene expression. These data demonstrate a novel role of c-Rel in the adaptive response to hyperosmotic stress, which is inhibited via a PACT/PKR-dependent dimer redistribution of the Rel family transcription factors. Our results suggest that inhibiting PACT-PKR signaling may prove a novel target for alleviating stress-induced inflammatory diseases.