Inhibitor of Apoptosis Proteins (IAPs) can bind to and inhibit caspases, the key executioners of apoptosis. Because IAPs are frequently overexpressed in human tumors, they have become major pharmacological targets for developing new cancer therapeutics. However, the precise physiological function of individual mammalian IAPs and their role as E3 ubiquitin-ligases in situ remain largely obscure. Here, we investigated the function of XIAP ubiquitin-ligase activity by inactivating the RING motif via gene targeting in the mouse. Removing the RING stabilized XIAP in apoptotic thymocytes, demonstrating that XIAP ubiquitin-ligase activity is a major determinant of XIAP protein stability. Surprisingly, the increased amounts of "XIAP-BIR-only" protein did not lead to attenuated but rather increased caspase activity and apoptosis. DeltaRING embryonic stem cells and fibroblasts had elevated caspase-3 enzyme activity, and XIAP DeltaRING embryonic fibroblasts were strongly sensitized to TNF-alpha-induced apoptosis. Similar results were obtained with XIAP deficient mice. Furthermore, deletion of the RING also improved the survival of mice in the Emu-Myc lymphoma model. This demonstrates a physiological requirement of XIAP ubiquitin-ligase activity for the inhibition of caspases and for tumor suppression in vivo.