Tumor necrosis factor (TNFα) receptor signaling can simultaneously activate caspase 8, the transcription factor, NF-κB and the kinase, JNK. While activation of caspase 8 is required for TNFα-induced apoptosis, and induction of NF-κB inhibits cell death, the precise function of JNK activation in TNFα signaling is not clearly understood. Here, we report that TNFα-mediated caspase 8 cleavage and apoptosis require a sequential pathway involving JNK, Bid, and Smac/DIABLO. Activation of JNK induces caspase 8-independent cleavage of Bid at a distinct site to generate the Bid cleavage product jBid. Translocation of jBid to mitochondria leads to preferential release of Smac/DIABLO, but not cytochrome c. The released Smac/DIABLO then disrupts the TRAF2-cIAP1 complex. We propose that the JNK pathway described here is required to relieve the inhibition imposed by TRAF2-cIAP1 on caspase 8 activation and induction of apoptosis. Further, our findings define a mechanism for crosstalk between intrinsic and extrinsic cell death pathways.