In sympathetic neurons, unlike most nonneuronal cells, growth factor withdrawal–induced apoptosis requires the development of competence in addition to cytochrome c release to activate caspases. Thus, although most nonneuronal cells die rapidly with cytosolic cytochrome c alone, sympathetic neurons are remarkably resistant unless they develop competence. We have identified endogenous X-linked inhibitor of apoptosis protein (XIAP) as the essential postcytochrome c regulator of caspase activation in these neurons. In contrast to wild-type neurons that are resistant to injection of cytochrome c, XIAP-deficient neurons died rapidly with cytosolic cytochrome c alone. Surprisingly, the release of endogenous Smac was not sufficient to overcome the XIAP resistance in sympathetic neurons. In contrast, the neuronal competence pathway permitted cytochrome c to activate caspases by inducing a marked reduction in XIAP levels in these neurons. Thus, the removal of XIAP inhibition appears both necessary and sufficient for cytochrome c to activate caspases in sympathetic neurons. These data identify a critical function of endogenous XIAP in regulating apoptosis in mammalian cells.