Ligation of death receptors or formation of the Apaf-1 apoptosome results in the activation of caspases and execution of apoptosis. We recently demonstrated that X-linked inhibitor-of-apoptosis protein (XIAP) associates with the apoptosome in vitro. By utilizing XIAP mutants, we now report that XIAP binds to the 'native' apoptosome complex via a specific interaction with the small p12 subunit of processed caspase-9. Indeed, we provide the first direct evidence that XIAP can simultaneously bind active caspases-9 and -3 within the same complex and that inhibition of caspase-3 by the Linker-BIR2 domain prevents disruption of BIR3-caspase-9 interactions. Recent studies suggest that inhibition of caspase-3 is dispensable for its anti-apoptotic effects. However, we clearly demonstrate that inhibition of caspase-3 is required to inhibit CD95 (Fas/Apo-1)-mediated apoptosis, whereas inhibition of either caspase-9 or caspase-3 prevents Bax-induced cell death. Finally, we illustrate for the first time that XIAP mutants, which are incapable of binding to caspases-9 and -3 are completely devoid of anti-apoptotic activity. Thus, XIAP's capacity to maintain inhibition of caspase-9 within the Apaf-1 apoptosome is influenced by its ability to simultaneously inhibit active caspase-3, and depending upon the apoptotic stimulus, inhibition of caspase-9 or 3 is essential for XIAP's anti-apoptotic activity.