We present Chandra and XMM-Newton observations of the composite star-forming/Seyfert galaxy IRAS20051-1117. The X-ray imaging and spectral properties reveal the presence of an active nucleus. The Chandra image shows a strong nuclear point source (L(2-10 keV) ~ 4x10^{42} erg s-1). The nuclear X-ray source coincides with a bright, alsoun-resolved, UV source which appears in the xmm Optical Monitor images. The xmm and chandra spectrum is well represented by a power-law with a photon index of ~1.7-1.9 and a thermal component with a temperature of 0.2 keV. We also detect an Fe line at 6.4 keV with an equivalent width of ~0.3 keV, typical of the iron lines that have been detected in the X-ray spectra of classical AGN. We find no evidence for short-term variability in the X-ray light curves, while we detect no variations between the xmm and chandra observations which are separated by about 20 days. Optical spectroscopic observations which were performed ~2.5 months after the xmm observation show that the optical spectrum is dominated by a star-forming galaxy component, although a weak broad Halpha component is present, in agreement with the results from past observations. The lack of strong AGN signatures in the optical spectrum of the source can be explained by the dilution of the nuclear AGN emission by the nuclear star-forming component and the strong emission of the underlying, bright host galaxy.