The four residues at the amino-terminus of mature Smac/DIABLO are an IAP binding motif (IBM). Upon exit from mitochondria, mature Smac interacts with inhibitor of apoptosis proteins (IAPs), abrogating caspase inhibition. We used the ubiquitin fusion model to express mature Smac in the cytosol. Transiently expressed mature Smac56-239 (called Smac56) and Smac60-239 (called Smac60), which lacks the IBM, interacted with X-linked inhibitor of apoptosis protein (XIAP). However, stable expression produced wild type Smac56 that failed to homodimerize, interact with XIAP, and potentiate caspase activation. Cytosolic Smac60 retained these functions. Cytosolic Smac56 apparently becomes posttranslationally modified at the dimer interface region, which obliterated the epitope for a monoclonal antibody. Cytosolic Smacδ, which has the IBM but lacks amino acids 62-105, homodimerized and weakly interacted with XIAP, but failed to potentiate apoptosis. These findings suggest that the IBM of Smac is a recognition point for a posttranslational modification(s) that blocks homodimerization and IAP interaction, and that amino acids 62-105 are required for the proapoptotic function of Smac.