Caspase activation, the executing event of apoptosis, is under deliberate regulation. IAP proteins inhibit caspase activity, whereas Smac/Diablo antagonizes IAP. XIAP, a ubiquitous IAP, can inhibit both caspase-9, the initiator caspase of the mitochondrial apoptotic pathway, and the downstream effector caspases, caspase-3 and caspase-7. Smac neutralizes XIAP inhibition of caspase-9 by competing for binding of the BIR3 domain of XIAP with caspase-9, whereas how Smac liberates effector caspases from XIAP inhibition is not clear. It is generally believed that binding of Smac with IAP generates a steric hindrance that prevents XIAP from inhibiting effector caspases, and therefore small molecule mimics of Smac are not able to reverse inhibition of the effector caspases. Surprisingly, we show here that binding of a dimeric Smac N-terminal peptide with the BIR2 domain of XIAP effectively antagonizes inhibition of caspase-3 by XIAP. Further, we defined the dynamic and cooperative interaction of Smac with XIAP: binding of Smac with the BIR3 domain anchors the subsequent binding of Smac with the BIR2 domain, which in turn attenuates the caspase-3 inhibitory function of XIAP. We also show that XIAP homotrimerizes via its C-terminal Ring domain, making its inhibitory activity toward caspase-3 more susceptible to Smac
