Histone H1 plays a crucial role in stabilizing higher order chromatin structure. Transcriptional activation, DNA replication, and chromosome condensation all require changes in chromatin structure and are correlated with the phosphorylation of histone H1. In this study, we describe a novel interaction between Pin1, a phosphorylation-specific prolyl isomerase, and phosphorylated histone H1. A sub-stoichiometric amount of Pin1 stimulated the dephosphorylation of H1 in vitro and modulated the structure of the C-terminal domain of H1 in a phosphorylation-dependent manner. Depletion of Pin1 destabilized H1 binding to chromatin only when Pin1 binding sites on H1 were present. Pin1 recruitment and localized histone H1 phosphorylation were associated with transcriptional activation independent of RNA polymerase II. We thus identify a novel form of histone H1 regulation through phosphorylation-dependent proline isomerization, which has consequences on overall H1 phosphorylation levels and the stability of H1 binding to chromatin.