ARTS (Sept4_i2), is a pro-apoptotic protein localized at the mitochondria of living cells. In response to apoptotic signals, ARTS rapidly translocates to the cytosol where it binds and antagonizes XIAP to promote caspase activation. However, the mechanism of interaction between these two proteins and how it is regulated remained to be explored. In this study, we show that ARTS and XIAP bind directly to each other, as recombinant ARTS and XIAP proteins co-immunoprecipitate together. We also show that over expression of ARTS alone is sufficient to induce a strong down-regulation of XIAP protein levels and that this reduction occurs through the ubiquitin proteasome system (UPS). Using various deletion and mutation constructs of XIAP we show that ARTS specifically binds to the BIR3 domain in XIAP. Moreover, we found that ARTS binds to different sequences in BIR3 than other IAP antagonists such as SMAC/Diablo. Computational analysis comparing the location of the putative ARTS interface in BIR3 with the known interfaces of SMAC/Diablo and caspase 9 support our results indicating that ARTS interacts with residues in BIR3 that are different from those involved in binding SMAC/Diablo and caspase 9. We therefore suggest that ARTS binds and antagonizes XIAP in a way which is distinct from other IAP-antagonists to promote apoptosis.