We define a squashed four-sphere by a dimensional reduction of a twisted S-4 x S-1, and construct explicitly a supersymmetric Yang-Mills action on it. The action includes a non-trivial dilaton factor and a theta term with a non-constant theta. The partition function of this theory is calculated using the localization technique. The resulting partition function can be written in the form consistent with the AGT relation due to the non-constant theta term. The parameter b which characterizes the partition function in this form is not restricted to be real for the squashed four-sphere.