Smac mimetics are being developed as a new class of anticancer therapies. Because the single-agent activity of Smac mimetics is very limited, rational combinations represent a viable strategy for their clinical development. The combination of Smac mimetics with TNF-related apoptosis inducing ligand (TRAIL) may be particularly attractive because of the low toxicity of TRAIL to normal cells and the synergistic antitumor activity observed for the combination. In this study, we have investigated the combination synergy between TRAIL and a potent Smac mimetic, SM-164, in vitro and in vivo and the underlying molecular mechanism of action for the synergy. Our study shows that SM-164 is highly synergistic with TRAIL in vitro in both TRAIL-sensitive and TRAIL-resistant cancer cell lines of breast, prostate, and colon cancer. Furthermore, the combination of SM-164 with TRAIL induces rapid tumor regression in vivo in a breast cancer xenograft model in which either agent is ineffective. Our data show that X-linked IAP (XIAP) and cellular IAP 1 (cIAP1), but not cIAP2, work in concert to attenuate the activity of TRAIL; SM-164 strongly enhances TRAIL activity by concurrently targeting XIAP and cIAP1. Moreover, although RIP1 plays a minimal role in the activity of TRAIL as a single agent, it is required for the synergistic interaction between TRAIL and SM-164. This study provides a strong rationale to develop the combination of SM-164 and TRAIL as a new therapeutic strategy for the treatment of human cancer.