Tumour necrosis factor-alpha (TNF-alpha) is a proinflammatory mediator that exerts its biological functions by binding two TNF receptors (TNF-RI and TNF-RII), which initiate biological responses by interacting with adaptor and signalling proteins. Among the signalling components that associate with TNF receptors are members of the TNF-R-associated factor (TRAF) family. TRAF2 is required for TNF-alpha-mediated activation of c-Jun N-terminal kinase (JNK), contributes to activation of NF-kappaB, and mediates anti-apoptotic signals,. TNF-RI and TNF-RII signalling complexes also contain the anti-apoptotic ('inhibitor of apoptosis') molecules c-IAP1 and c-IAP2 (refs 5, 6), which also have RING domain-dependent ubiquitin protein ligase (E3) activity. The function of IAPs in TNF-R signalling is unknown. Here we show that binding of TNF-alpha to TNF-RII induces ubiquitination and proteasomal degradation of TRAF2. Although c-IAP1 bound TRAF2 and TRAF1 in vitro, it ubiquitinated only TRAF2. Expression of wild-type c-IAP1, but not an E3-defective mutant, resulted in TRAF2 ubiquitination and degradation. Moreover, E3-defective c-IAP1 prevented TNF-alpha-induced TRAF2 degradation and inhibited apoptosis. These findings identify a physiologic role for c-IAP1 and define a mechanism by which TNF-RII-regulated ubiquitin protein ligase activity can potentiate TNF-induced apoptosis.