TRAIL (Apo2 ligand) is a member of the tumor necrosis factor (TNF) family of cytokines that induces apoptosis. Because TRAIL preferentially kills tumor cells, sparing normal tissues, interest has emerged in applying this biological factor for cancer therapy in humans. However, not all tumors respond to TRAIL, raising questions about resistance mechanisms. We demonstrate here that a variety of natural and synthetic ligands of peroxisome proliferator-activated receptor-gamma (PPAR gamma) sensitize tumor but not normal cells to apoptosis induction by TRAIL. PPAR gamma ligands selectively reduce levels of FLIP, an apoptosis-suppressing protein that blocks early events in TRAIL/TNF family death receptor signaling. Both PPAR gamma agonists and antagonists displayed these effects, regardless of the levels of PPAR gamma expression and even in the presence of a PPAR gamma dominant-negative mutant, indicating a PPAR gamma-independent mechanism. Reductions in FLIP and sensitization to TRAIL-induced apoptosis were also not correlated with NF-kappa B, further suggesting a novel mechanism. PPAR gamma modulators induced ubiquitination and proteasome-dependent degradation of FLIP, without concomitant reductions in FLIP mRNA. The findings suggest the existence of a pharmacologically regulated novel target of this class of drugs that controls FLIP protein turnover, and raise the possibility of combining PPAR gamma modulators with TRAIL for more efficacious elimination of tumor cells through apoptosis.