Cellular cholesterol homeostasis is controlled by sterol-regulated proteolysis of membrane-bound transcription factors called sterol-regulatory element binding proteins (SREBPs). CPP32, a cysteine protease, was shown previously to cleave SREBP-1 and SREBP-2 in vitro at an aspartic acid between the basic helix-loop-helix leucine zipper domain and the first trans-membrane domain, liberating a transcriptionally active fragment. Here, we show that CPP32 exists in an inactive 32 kDa form in Chinese hamster ovary (CHO) cells. When apoptosis was induced with the protein kinase inhibitor staurosporine, CPP32 was cleaved to subunits of 20 and 10 kDa to form the active protease. Under these conditions membrane-bound SREBP-1 and SREBP-2 were both cleaved, and the transcriptionally active N-terminal fragments were found in nuclear extracts. Similar results were obtained in human U937 cells induced to undergo apoptosis by anti-Fas and etoposide. The apoptosis-induced cleavage of SREBPs was not suppressed by sterols, indicating that apoptosis-induced cleavage and sterol-regulated cleavage are mediated by different proteases. CHO cells expressing a mutant SREBP-2 with an Asp--> Ala mutation at the CPP32 cleavage site showed sterol-regulated cleavage but no apoptosis-induced cleavage. These data are consistent with the emerging concept that CPP32 is a central mediator in apoptosis. They also indicate that SREBPs, like poly (ADP) ribose polymerase, are cleaved by CPP32 during programmed cell death.