Insulin-like growth factor (IGF) binding protein-3 (IGFBP-3) promotes apoptosis of cancer cells by both IGF-dependent and IGF-independent mechanisms. In vitro phosphorylation of IGFBP-3 by DNA-dependent protein kinase (DNA-PK) has been reported but with unknown functional relevance. Using a chemical inhibitor for DNA-PK in prostate cancer cells and a paired system of glioblastoma cell lines that either lack or express DNA-PK, we show that the apoptosis-promoting and growth-inhibitory actions of IGFBP-3 are completely abrogated in the absence of catalytically active DNA-PK. In the absence of DNA-PK activity, IGFBP-3 has reduced nuclear accumulation and is unable to bind its nuclear binding partner retinoid X receptor (RXR) alpha. We assessed the importance of the three potential DNA-PK phosphorylation sites in IGFBP-3 using PCR-based site-directed mutagenesis. When transfected into 22RV1 cells, IGFBP-3-S165A and IGFBP-3-T170A functioned in an identical manner to wild-type IGFBP-3 to induce apoptosis. In contrast, IGFBP-3-S156A was unable to promote apoptosis and exhibited reduced nuclear accumulation, suggesting a key role for DNA-PK-dependent phosphorylation in the regulation of IGFBP-3 action. These studies reveal a novel regulatory mechanism for the actions of IGFBP-3 in prostate cancer and show phosphorylation of Ser(156) to be functionally critical in its apoptosis-inducing actions.