Inhibitor of apoptosis (IAP) proteins are key regulators of intracellular signaling that interact with tumor necrosis factor (TNF) receptor superfamily members as well as proapoptotic molecules such as Smac/DIABLO and caspases. Whereas the X-linked IAP is an established caspase inhibitor, the protective mechanisms utilized by the cellular IAP (c-IAP) proteins are less clear because c-IAPs bind to but do not inhibit the enzymatic activities of caspases. In this study, c-IAPs are shown to be highly unstable molecules that undergo autoubiquitination. The autoubiquitination of c-IAP1 is blocked upon coexpression with TNF receptor-associated factor (TRAF) 2, and this is achieved by inhibition of the E3 ubiquitin ligase activity intrinsic to the RING of c-IAP1. Consistent with these observations, loss of TRAF2 results in a decrease in c-IAP1 levels. Stabilized c-IAP1 was found to sequester and prevent Smac/DIABLO from antagonizing X-linked IAP and protect against cell death. Therefore, this study describes an intriguing cytoprotective mechanism utilized by c-IAP1 and provides critical insight into how IAP proteins function to alter the apoptotic threshold.