Transcription factor involved in the transcriptional regulation of osmoprotective and inflammatory genes. Regulates hypertonicity-induced cellular accumulation of osmolytes. Homodimer when bound to DNA, completely encircles its DNA target. Does not bind with Fos and Jun transcription factors (By similarity). Interacts with CIDEC; this interaction is direct and retains NFAT5 in the cytoplasm. Nuclear distribution increases under hypertonic conditions. Up-regulated under hypertonic conditions. Phosphorylated at Thr-152 by CDK5 in response to osmotic stress; this phosphorylation mediates its rapid nuclear localization.