IRE1 is a conserved dual endoribonuclease/protein kinase that is indispensable for directing the endoplasmic reticulum (ER) stress response in yeast, flies, and worms. In mammalian systems, however, the precise biological activities carried out by IRE1alpha are unclear. Here, molecular and chemical genetic approaches were used to control IRE1 activity in a number of prostate cancer cell lines and the resulting impact on gene transcription, cell survival, and proliferation was examined. Modulating IRE1alpha activity had no transcriptional effect on the induction of genes classically associated with the ER stress response (Grp78 and CHOP) or cell survival when confronted with ER stress agents. Rather, IRE1alpha activity was positively correlated to proliferation. Since Xbp-1 mRNA is the sole known substrate for IRE1 endoribonuclease activity, the role of this transcription factor in mediating proliferation was examined. Repressing total Xbp-1 levels by siRNA techniques effectively slowed proliferation. In an effort to identify IRE1/XBP-1 targets responsible for the cell cycle response, genome-wide differential mRNA expression analysis was performed. Consistent with its ability to sense ER stress, IRE1alpha induction led to an enrichment of ER-Golgi, plasma membrane, and secretory gene products. An increase in cyclin A1 expression was the only differentially expressed cell cycle regulatory gene found. Greater cyclin A protein levels were consistently observed in cells with active IRE1alpha and were dependent on XBP-1. We conclude that IRE1alpha activity controls a subset of the ER stress response and mediates proliferation through tight control of Xbp-1 splicing.