Coupling of endoplasmic reticulum (ER) stress to dimerisation-dependent activation of the UPR transducer IRE1 is incompletely understood. Whilst the luminal co-chaperone ERdj4 promotes a complex between the Hsp70 BiP and IRE1's stress-sensing luminal domain (IRE1LD) that favours the latter's monomeric inactive state and loss of ERdj4 de-represses IRE1, evidence linking these cellular and in vitro observations is presently lacking. We report that enforced loading of endogenous BiP onto endogenous IRE1α repressed UPR signalling in CHO cells and deletions in the IRE1α locus that de-repressed the UPR in cells, encode flexible regions of IRE1LD that mediated BiP-induced monomerisation in vitro. Changes in the hydrogen exchange mass spectrometry profile of IRE1LD induced by ERdj4 and BiP confirmed monomerisation and were consistent with active destabilisation of the IRE1LD dimer. Together, these observations support a competition model whereby waning ER stress passively partitions ERdj4 and BiP to IRE1LD to initiate active repression of UPR signalling.