The effectiveness of IFN-alpha2b for human multiple myeloma has been variable. TRAIL has been proposed to mediate IFN-alpha2b apoptosis in myeloma. In this study we assessed the effects of IFN-alpha2b signaling on the apoptotic activity of TRAIL and human myeloma cell survival. While TRAIL was one of the most potently induced proapoptotic genes in myeloma cells following IFN-alpha2b treatment, less than 20% of myeloma cells underwent apoptosis. Thus, we hypothesized that an IFN-stimulated gene (ISG) with prosurvival activity might suppress TRAIL-mediated apoptosis. Consistent with this, IFN-alpha2b stabilized mitochondria and inhibited caspase-3 activation, which antagonized TRAIL-mediated apoptosis and cytotoxicity after 24 hours of cotreatment in cell lines and in fresh myeloma cells, an effect not evident after 72 hours. Induced expression of G1P3, an ISG with largely unknown function, was correlated with the antiapoptotic activity of IFN-alpha2b. Ectopically expressed G1P3 localized to mitochondria and antagonized TRAIL-mediated mitochondrial potential loss, cytochrome c release, and apoptosis, suggesting specificity of G1P3 for the intrinsic apoptosis pathway. Furthermore, RNAi-mediated downregulation of G1P3 restored IFN-alpha2b-induced apoptosis. Our data identify the direct role of a mitochondria-localized prosurvival ISG in antagonizing the effect of TRAIL. Curtailing G1P3-mediated antiapoptotic signals could improve therapies for myeloma or other malignancies.