The mitochondrial pathway is critical for the efficient execution of death receptor-initiated apoptosis in certain cell types. Questions remain as to why the mitochondria are required in that scenario. We investigated the molecular events that determined the need for the mitochondria by using an in vivo model of anti-Fas-induced hepatocyte apoptosis. In wild-type mice, Fas stimulation resulted in normal activation of caspase-3, with the generation of the active p19-p12 complex. In bid-deficient mice, caspase-3 activation was arrested after the initial cleavage at Asp(175). This allowed the generation of the p12 small subunit, but the p20 large subunit could not be further processed to the p19 subunit. The p20-p12 complex generated by Fas stimulation in bid-deficient hepatocytes was inactive, arresting the death program. Failure of p20/p12 caspase-3 to mature and to exhibit activity was because of the inhibition by the inhibitor-of-apoptosis proteins (IAPs), such as XIAP, and also to a low caspase-8 activity. This block could be overcome in wild-type mice by two mechanisms. Smac was released from mitochondria early following Fas activation and was competitively bound to the IAPs to reverse their effects. XIAP could also be cleaved, and this occurred later and was likely mediated by enhanced caspase activities. Both mechanisms were dependent on Bid and thus were not operative in bid-deficient hepatocytes. In conclusion, mitochondrial activation by Bid is required for reversing the IAP inhibition through Smac release. It is also required for the alternative activation of caspases through cytochrome c release, as demonstrated previously. Together, these events ensure a successful progression of the death program initiated by the death receptor activation in the hepatocyte.