ARTS is an unusual septin-like mitochondrial protein that was originally shown to mediate TGF-beta-induced apoptosis. Recently, we found that ARTS is also important for cell killing by other pro-apoptotic factors, such as arabinoside, etoposide, staurosporine and Fas. In Drosophila, the IAP antagonists Reaper, Hid and Grim are essential for the induction of virtually all apoptotic cell death. We found that mutations in peanut, which encodes a Drosophila homologue of ARTS, can dominantly suppress cell killing by Reaper, Hid and Grim, indicating that peanut acts downstream or in parallel to these. In mammalian cells, ARTS is released from mitochondria upon pro-apoptotic stimuli and then binds to XIAP. Binding of ARTS to XIAP is direct, as recombinant ARTS and XIAP proteins can bind to each other in vitro. ARTS binding to XIAP is specific and related to its pro-apoptotic function, as mutant forms of ARTS (or related septins) that fail to bind XIAP failed to induce apoptosis. ARTS leads to decreased XIAP protein levels and caspase activation. Our data suggest that ARTS induces apoptosis by antagonizing IAPs.