In previous studies we have shown that the sensitivity of melanoma cell lines to tumor necrosis factor-related apoptosis-inducing ligand (TRAIL)-induced apoptosis was determined largely by the level of expression of death receptor TRAIL receptor 2 on the cells. However, approximately one-third of melanoma cell lines were resistant to TRAIL, despite expression of high levels of TRAIL receptor 2. The present studies show that these cell lines had similar levels of TRAIL-induced activated caspase-3 as the TRAIL-sensitive lines, but the activated caspase-3 did not degrade substrates downstream of caspase-3 [inhibitor of caspase-activated DNase and poly(ADP-ribose) polymerase]. This appeared to be due to inhibition of caspase-3 by X-linked inhibitor of apoptosis (XIAP) because XIAP was bound to activated caspase-3, and transfection of XIAP into TRAIL-sensitive cell lines resulted in similar inhibition of TRAIL-induced apoptosis. Conversely, reduction of XIAP levels by overexpression of Smac/DIABLO in the TRAIL-resistant melanoma cells was associated with the appearance of catalytic activity by caspase-3 and increased TRAIL-induced apoptosis. TRAIL was shown to cause release of Smac/DIABLO from mitochondria, but this release was greater in TRAIL-sensitive cell lines than in TRAIL-resistant cell lines and was associated with down-regulation of XIAP levels. Furthermore, inhibition of Smac/DIABLO release by overexpression of Bcl-2 inhibited down-regulation of XIAP levels. These results suggest that Smac/DIABLO release from mitochondria and its binding to XIAP are an alternative pathway by which TRAIL induces apoptosis of melanoma, and this pathway is dependent on the release of activated caspase-3 from inhibition by XIAP and possibly other inhibitor of apoptosis family members.