ARTS (Sept4_i2) is a pro-apoptotic tumor suppressor protein that functions as an antagonist of X-linked IAP (XIAP) to promote apoptosis. It is generally thought that mitochondrial outer membrane permeabilization (MOMP) occurs before activation of caspases and is required for it. Here, we show that ARTS initiates caspase activation upstream of MOMP. In living cells, ARTS is localized to the mitochondrial outer membrane. In response to apoptotic signals, ARTS translocates rapidly to the cytosol in a caspase-independent manner, where it binds XIAP and promotes caspase activation. This translocation precedes the release of cytochrome C and SMAC/Diablo, and ARTS function is required for the normal timing of MOMP. We also show that ARTS-induced caspase activation leads to cleavage of the pro-apoptotic Bcl-2 family protein Bid, known to promote MOMP. We propose that translocation of ARTS initiates a first wave of caspase activation that can promote MOMP. This leads to the subsequent release of additional mitochondrial factors, including cytochrome C and SMAC/Diablo, which then amplifies the caspase cascade and causes apoptosis.