Immunomodulators such as Bacillus Calmette-Guerin and interferon are clinically active in transitional cell carcinoma of the bladder, but their mechanisms of action remain unclear. Here we investigated the effects of IFNalpha on tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) expression and apoptosis in a panel of 20 human bladder cancer cell lines. Six (30%) displayed significant DNA fragmentation in response to increasing concentrations of IFNalpha (10-100,000 units/mL). In these lines IFNalpha induced early activation of caspase-8, and DNA fragmentation was blocked by a caspase-8-selective inhibitor (IETDfmk), consistent with the involvement of death receptor(s) in cell death. IFNalpha stimulated marked increases in TRAIL mRNA and protein in the majority of IFN-sensitive and IFN-resistant cell lines. A blocking anti-TRAIL antibody significantly inhibited IFN-induced DNA fragmentation in four of six IFN-sensitive cell lines, confirming that TRAIL played a direct role in cell death. Bortezomib (PS-341, Velcade), a potent TRAIL-sensitizing agent, increased sensitivity to IFNalpha in two of the IFN-resistant cell lines that produced large amounts of TRAIL in response to IFN treatment. Our data show that IFN-induced apoptosis in bladder cancer cells frequently involves autocrine TRAIL production. Combination therapy strategies aimed at overcoming TRAIL resistance may be very effective in restoring IFN sensitivity in a subset of human bladder tumors.