Members of the NF-kappaB/Rel and inhibitor of apoptosis (IAP) protein families have been implicated in signal transduction programs that prevent cell death elicited by the cytokine tumor necrosis factor alpha (TNF). Although NF-kappaB appears to stimulate the expression of specific protective genes, neither the identities of these genes nor the precise role of IAP proteins in this anti-apoptotic process are known. We demonstrate here that NF-kappaB is required for TNF-mediated induction of the gene encoding human c-IAP2. When overexpressed in mammalian cells, c-IAP2 activates NF-kappaB and suppresses TNF cytotoxicity. Both of these c-IAP2 activities are blocked in vivo by coexpressing a dominant form of IkappaB that is resistant to TNF-induced degradation. In contrast to wild-type c-IAP2, a mutant lacking the C-terminal RING domain inhibits NF-kappaB induction by TNF and enhances TNF killing. These findings suggest that c-IAP2 is critically involved in TNF signaling and exerts positive feedback control on NF-kappaB via an IkappaB targeting mechanism. Functional coupling of NF-kappaB and c-IAP2 during the TNF response may provide a signal amplification loop that promotes cell survival rather than death.