We have previously demonstrated that overexpression of Cell Death Inhibiting RNA (CDIR), a portion of the 3'untranslated region (UTR) of KIAA0425, inhibits Interferon-gamma (IFN-gamma) induced apoptosis in HeLa cells (Shchors et al., J Biol Chem 2002; 277:47061-72). IFN-gamma is known to sensitize cells to killing induced by the death receptor ligands such as Fas/APO-1/CD95 and TNF-related apoptosis-inducing ligand (TRAIL/Apo-2L). Here we report that while CDIR does not alter the response of cells to Fas or TRAIL, it significantly modulates IFN-gamma-induced sensitization of HeLa cells to these death-inducing ligands. Interestingly, while CDIR abrogates the IFN-gamma-modulated sensitization to Fas, it enhances the sensitization to TRAIL. Expression of CDIR did not alter initial steps of IFN-gamma signaling including induction of Signal Transducer and Activator-1 (Stat1), caspase-1 or Interferon Regulatory Factor-1 (IRF1) transcription. In contrast, although expression of CDIR does not affect the protein level of caspase-1 or STAT1, it does significantly reduce the level of IRF1 protein. Thus, CDIR mediates IFN-gamma-induced apoptosis, at least in part, by reducing the level of the pro-apoptotic tumor suppressor gene IRF1 via a post-transcriptional mechanism. Since tumor cells are often less sensitive to Fas and more sensitive to TRAIL than normal cells, we suggest that CDIR or CDIR-like activity could contribute to such a phenotype of tumor cells.