In recent years, Hsp90 is found to interact with several telomeric proteins at various phases of cell cycle. The Hsp90 chaperone system controls assembly and disassembly of telomere structures and thus maintains the dynamic state of telomere. Here, for the first time we report that the activity of another telomeric protein Sir2p is modulated by Hsp82, the ortholog of Hsp90 from budding yeast (Saccharomyces cerevisiae). In a temperature sensitive Hsp90 deficient yeast strain (iG170Dhsp82), less abundant Sir2p is observed, resulting in de-repression of telomere silencing and a complete loss of mating type silencing. Intriguingly, over expression of Hsp90, either by exposing cells to heat shock or by introducing HSP82 overexpression plasmid also yields reduced level of Sir2p, with a consequential loss of telomere silencing. Thus, Hsp90 homeostasis maintains the cellular pool of Sir2p and thereby controls the reversible nature of telomere silencing. Interestingly, such regulation is independent of one of its major co-chaperones Sba1 (human ortholog of p23).