The TRAIL pathway is a potential therapeutic target for anticancer drugs due to selective cytotoxicity in cancer cells. Despite considerable promise, TRAIL or TRAIL receptor agonists have been used thus far with limited success in multiple clinical trials, in part due to acquired TRAIL resistance during chemotherapeutic treatment. Hepatocellular carcinoma (HCC) is a common solid tumor and the third leading cause of cancer-related death worldwide. Classical chemotherapy is not effective for HCC treatment and targeted therapy is limited to sorafenib. Isolated from Panax ginseng CA Meyer, 20(S)-ginsenoside Rg3 is a steroidal saponin with high pharmacologic activity that has been shown to sensitize cells to some chemotherapeutic agents. We investigated the sensitizing effect of Rg3 on TRAIL-induced cell death in HCC cells. We show Rg3 is capable of promoting TRAIL-induced apoptosis in a number of HCC cell lines, including HepG2, SK-Hep1, Huh-7, and Hep3B, but not in normal HL-7702 hepatocytes, indicating that Rg3 sensitization to TRAIL may be specific to cancer cells. Mechanistically, we found that Rg3 upregulates DR5 expression at the transcriptional level. DR5 upregulation in this case is mediated by C/EBP homology protein (CHOP), an important endoplasmic reticulum stress responsive protein. Furthermore, Rg3 is well tolerated and enhances the therapeutic efficacy of TRAIL in mouse xenograft models, suggesting that chemosensitization also occurs in vivo. Taken together, our study identifies Rg3 as a novel anticancer therapeutic agent and supports the further development of Rg3 as a chemosensitizer in combined therapy with TRAIL.