B-cell-activating factor of the TNF family (BAFF) is a critical factor for B-cell survival and maturation through non-canonical nuclear factor kappaB (NF-kappaB) pathway, a NF-kappaB inducing kinase (NIK)-dependent pathway for the processing of NF-kappaB2 p100 to generate p52. While BAFF acts primarily through BAFF receptor (BAFF-R), the transmembrane activator and CAML interactor (TACI), the other receptor for BAFF, is thought to serve as a negative regulator for B-cell responses. However, how TACI regulates NF-kappaB2 activity is largely unknown. In this study, we showed that constitutive activation of TACI signaling suppressed BAFF-R-mediated NF-kappaB2 p100 processing with the up-regulation of cellular inhibitors of apoptosis 1 (cIAP1) and TNF receptor associated factor (TRAF)-associated NF-kappaB activator (TANK). The ubiquitination of NIK by cIAP1 was inhibited by the expression of TRAF2 with physical binding to cIAP1. TANK deficiency by small interfering RNA (siRNA) impaired TACI-dependent inhibition of NF-kappaB2 p100 processing. TANK also inhibited TRAF2-mediated cIAP1 inactivation. Moreover, the recruitment of TRAF2 to TACI induced the ubiquitination of NIK. Taken together, the regulation of NIK by TACI through the interaction of TANK/TRAF2/cIAP1 plays a pivotal role in the suppression of non-canonical NF-kappaB signaling.