Cyclooxygenase-2 (COX-2) is up-regulated in human colon carcinomas, and its inhibition is associated with a reduction in tumorigenesis and a promotion of apoptosis. However, the mechanisms responsible for the antitumor effects of COX-2 inhibitors and how COX-2 modulates apoptotic signaling have not been clearly defined. We have shown that COX-2 inhibition sensitizes human colon carcinoma cells to tumor necrosis factor-related apoptosis-inducing ligand (TRAIL)-induced apoptosis by inducing clustering of the TRAIL receptor DR5 at the cell surface and the redistribution of the death-inducing signaling complex components (DR5, FADD, and procaspase-8) into cholesterol-rich and ceramide-rich domains known as caveolae. This process requires the accumulation of arachidonic acid and sequential activation of acid sphingomyelinase for the generation of ceramide within the plasma membrane outer leaflet. The current study highlights a novel mechanism to circumvent colorectal carcinoma cell resistance to TRAIL-mediated apoptosis using COX-2 inhibitors to manipulate the lipid metabolism within the plasma membrane.