Adenosine-to-inosine RNA editing constitutes a crucial component of the cellular transcriptome and critically underpins organism survival and development. While recent high-throughput approaches have provided comprehensive documentation of the RNA editome, its functional output remains mostly unresolved, particularly for events in the non-coding regions. Gene ontology analysis of the known RNA editing targets unveiled a preponderance of genes related to apoptosis regulation, among which proto-oncogenes XIAP and MDM2 encode two the most abundantly edited transcripts. To further decode this potential functional connection, here we showed that the main RNA editor ADAR1 directly targets this 3' UTR editing of XIAP and MDM2, and further exerts a negative regulation on the expression of their protein products. This post-transcriptional silencing role was mediated via the inverted Alu elements in the 3' UTR but independent of alteration in transcript stability or miRNA targeting. Rather, we discovered that ADAR1 competes transcript occupancy with the RNA shuttling factor STAU1 to facilitate nuclear retention of the XIAP and MDM2 mRNAs. As a consequence, ADAR1 may acquire functionality in part by conferring spatial distribution and translation efficiency of the target transcripts. Finally, abrogation of ADAR1 expression or catalytic activity elicited a XIAP-dependent suppression of apoptotic response, whereas ectopic expression reversed this protective effect on cell death. Together, our results extended the known functions of ADAR1 and RNA editing to the critical fine-tuning of the intracellular apoptotic signaling and also provided mechanistic explanation for ADAR1's roles in development and tumorigenesis.