Caspases are critical proapoptotic proteases that execute cell death signals by selectively cleaving proteins at Asp residues to alter their function. Caspases trigger apoptotic chromatin degradation by activating caspase-activated DNase and by inactivating a number of enzymes that sense or repair DNA damage. We have identified the mismatch repair protein MLH1 as a novel caspase-3 substrate by screening small pools of a human prostate adenocarcinoma cDNA library for cDNAs encoding caspase substrates. In this report, we demonstrate that human MLH1 is specifically cleaved by caspase-3 at Asp(418) in vitro. Furthermore, MLH1 is rapidly proteolyzed by caspase-3 in cancer cells induced to undergo apoptosis by treatment with tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) or the topoisomerase II inhibitor etoposide, which damages DNA. Importantly, proteolysis of MLH1 by caspase-3 triggers its partial redistribution from the nucleus to the cytoplasm and generates a proapoptotic carboxyl-terminal product. In addition, we demonstrate that a caspase-3 cleavage-resistant D418E MLH1 mutant inhibits etoposide-induced apoptosis but has little effect on TRAIL-induced apoptosis. These results indicate that the proteolysis of MLH1 by caspase-3 plays a functionally important and previously unrecognized role in the execution of DNA damage-induced apoptosis.