A large number of correlative studies have established that the activation of the unfolded protein response (UPR) alters the cell's sensitivity to chemotherapeutic agents. Although the induction of the glucose-regulated proteins (GRPs) is commonly used as an indicator for the UPR, the direct role of the GRPs in conferring resistance to DNA damaging agents has not been proven. We report here that without the use of endoplasmic reticulum (ER) stress inducers, specific overexpression of GRP78 results in reduced apoptosis and higher colony survival when challenged with topoisomerase II inhibitors, etoposide and doxorubicin, and topoisomerase I inhibitor, camptothecin. While investigating the mechanism for the GRP78 protective effect against etoposide-induced cell death, we discovered that in contrast to the UPR, GRP78 overexpression does not result in G1 arrest or depletion of topoisomerase II. Caspase-7, an executor caspase that is associated with the ER, is activated by etoposide. We show here that specific expression of GRP78 blocks caspase-7 activation by etoposide both in vivo and in vitro, and this effect can be reversed by addition of dATP in a cell-free system. Recently, it was reported that ectopically expressed GRP78 and caspases-7 and -12 form a complex, thus coupling ER stress to the cell death program. However, the mechanism of how GRP78, a presumably ER lumen protein, can regulate cytosolic effectors of apoptosis is not known. Here we provide evidence that a subpopulation of GRP78 can exist as an ER transmembrane protein, as well as co-localize with caspase-7, as confirmed by fluorescence microscopy. Co-immunoprecipitation studies further reveal endogenous GRP78 constitutively associates with procaspase-7 but not with procaspase-3. Lastly, a GRP78 mutant deleted of its ATP binding domain fails to bind procaspase-7 and loses its protective effect against etoposide-induced apoptosis.