Smac-mimetics are emerging as promising anti-cancer agents and are being evaluated in clinical trials for a variety of malignancies. Smac-mimetics can induce TNF production from a subset of tumor cells and simultaneously sensitize them to TNF-induced apoptosis. However, TNF derived from other cellular sources, such as cytotoxic lymphocytes (CLs) within the tumor, may also contribute to the anti-tumor activity of SMs. Here, we show that CD8+ T cells and NK cells potently kill tumor cells in the presence of the SM, birinapant. Enhanced CL killing occurred through TNF secretion upon tumor antigen recognition or NK-activating receptor ligation. Importantly, the perforin/granzyme route to CL-mediated tumor cell killing was dispensable for the efficacy of birinapant, emphasizing the importance of the TNF-mediated apoptosis pathway. Time-lapse microscopy revealed that birinapant sensitized tumor cells to apoptosis as bystanders and to membrane-bound TNF delivered to tumor cells within the immunological synapse. Furthermore, PD-L1 expression on tumor cells suppressed antigen-driven TNF production by CD8+ T cells, which could be antagonized through PD-1 blockade. Importantly, the elevated levels of TNF produced upon PD-1 blockade further enhanced tumor cell killing when combined with birinapant. The combined anti-tumor activity of IAP antagonism and PD-1 blockade occurred independently of perforin-mediated tumor cell death. Taken together, we identify CL-derived TNF as a potent effector of birinapant mediated anti-tumor immunity and opportunity for combination therapy through co-inhibition of immune checkpoints.