Members of the viral Flice/caspase-8 inhibitory protein (v-FLIP) family prevent induction of apoptosis by death receptors through inhibition of the processing and activation of procaspase-8 and -10 at the level of the receptor-associated death-inducing signaling complex (DISC). Here, we have addressed the molecular function of the v-FLIP member MC159 of the human molluscum contagiosum virus. MC159 FLIP powerfully inhibited both caspase-dependent and caspase-independent cell death induced by Fas. The C-terminal region of MC159 bound TNF receptor-associated factor (TRAF)3, was necessary for optimal TRAF2 binding, and mediated the recruitment of both TRAFs into the Fas DISC. TRAF-binding-deficient mutants of MC159 showed impaired inhibition of FasL-induced caspase-8 processing and Fas internalization, and had reduced antiapoptotic activity. Our findings provide evidence that a MC159/TRAF2/TRAF3 complex regulates a new aspect of Fas signaling, and identify MC159 FLIP as a molecule that targets multiple features of Fas-induced cell death.