Tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) exerts potent cytotoxic activity against transformed keratinocytes, whereas primary keratinocytes are relatively resistant. In several cell types, inhibition of the proteasome sensitizes for TRAIL-induced apoptosis by interference with NF-kappaB activation. Here we describe a novel intracellular mechanism of TRAIL resistance in primary cells and how this resistance is removed by proteasome inhibitors independent of NF-kappaB in primary human keratinocytes. This sensitization was not mediated at the receptor-proximal level of TRAIL DISC formation or caspase 8 activation but further downstream. Activation of caspase 3 was critical, as it only occurred when mitochondrial apoptotic pathways were activated, as reflected by Smac/DIABLO, HtrA2, and cytochrome c release. Smac/DIABLO and HtrA2 are needed to release the X-linked inhibitor-of-apoptosis protein (XIAP)-mediated block of full caspase 3 maturation. XIAP can effectively block caspase 3 maturation and, intriguingly, is highly expressed in primary but not in transformed keratinocytes. Ectopic XIAP expression in transformed keratinocytes resulted in increased resistance to TRAIL. Our data suggest that breaking of this resistance via proteasome inhibitors, which are potential anticancer drugs, may sensitize certain primary cells to TRAIL-induced apoptosis and could thereby complicate the clinical applicability of a combination of TRAIL receptor agonists with proteasome inhibitors.