Inhibitor of apoptosis proteins (IAPs) prevent apoptosis through direct inhibition of caspases. The serine protease HtrA2/Omi has an amino-terminal IAP interaction motif like that found in Reaper, which displaces IAPs from caspases, leading to enhanced caspase activity. The cell death-promoting properties of HtrA2/Omi are not only exerted through its capacity to oppose IAP inhibition of caspases but also through its integral serine protease activity. We have used peptide libraries to determine the optimal substrate sequence for cleavage by HtrA2 and also the preferred binding sequence for its PDZ domain. Using these peptides, we show that the PDZ domain of HtrA2/Omi suppresses the proteolytic activity unless it is engaged by a binding partner. Subjecting HtrA2/Omi to heat shock treatment also increases its protease activity. Unexpectedly, binding of X-linked inhibitor of apoptosis protein (XIAP) to the Reaper motif of HtrA2/Omi results in a marked increase in proteolytic activity, suggesting a new role for IAPs. When HtrA2/Omi is released from mitochondria following an apoptotic stimulus, binding to IAPs may switch their function from caspase inhibition to serine protease activation. Thus although IAP overexpression can suppress caspase activation, it could have the opposite effect on HtrA2/Omi-dependent cell death. This, together with the ability of HtrA2/Omi to degrade IAPs, may limit the overall cellular protection that can be provided by these proteins.