London's HJPR was founded in 2003 by Simon Jones and Jonathan Hackford, who had previously worked together for six years at the agency Freuds.
A joint statement from Jones and Hackford said: "After 12-and-a-half years working together we have both decided that the time has come for us to part company and move on to new projects.
"We are both very proud of what we have achieved over the past 12 years but are excited about the future. We will both be setting up individual PR agencies and will continue to work with our respective clients and management companies."
The agency has four employees, and discussions about their future will now begin, Jones said.
Jones' current clients include One Direction, Emma Bunton, Little Mix and TV personalities Ant & Dec. Hackford works with comedian Jack Whitehall and TV presenters Davina McCall and Holly Willoughby among others.
One Direction announced in August that the group would split temporarily to pursue solo projects, although they have recently released the album Made in the AM.