XIAP (X chromosome-linked inhibitor of apoptosis) is a member of the anti-apoptotic IAP gene family and an inhibitor of caspase-3. We show here that loss of XIAP renders cells highly sensitive to oxidative stress. Stimulation of XIAP(-/-) MEF with hydrogen peroxide, or other agents that generate reactive oxygen species (ROS) results in increased apoptosis assessed by caspase-3 activity and PARP cleavage. Furthermore, we observed increased levels of ROS and diminished expression of antioxidative genes, e.g., SOD1, -2, NQO1, HO-1, and Txn2 in XIAP(-/-) cells. In addition, stimulation of XIAP(-/-) MEF with hydrogen peroxide resulted in enhanced phosphorylation of JNK. Our findings reveal that XIAP, in addition to its well described caspase-inhibitory function, prevents prolonged JNK activation and is critically involved in modulating ROS levels through regulation of antioxidative genes, thereby inhibiting ROS-induced apoptosis.