ERK5 is a protein kinase that also contains a nuclear localisation signal and a transcriptional transactivation domain. Inhibition of ERK5 has therapeutic potential in cancer and inflammation and this has prompted the development of ERK5 kinase inhibitors (ERK5i). However, few ERK5i programmes have taken account of the ERK5 transactivation domain. We have recently shown that the binding of small molecule ERK5i to the ERK5 kinase domain stimulates nuclear localisation and paradoxical activation of its transactivation domain. Other kinase inhibitors paradoxically activate their intended kinase target, in some cases leading to severe physiological consequences highlighting the importance of mitigating these effects. Here, we review the assays used to monitor ERK5 activities (kinase and transcriptional) in cells, the challenges faced in development of small molecule inhibitors to the ERK5 pathway, and classify the molecular mechanisms of paradoxical activation of protein kinases by kinase inhibitors.