Lysosomal membrane permeabilization is an essential step in TRAIL-induced apoptosis of liver cancer cell lines. TRAIL-induced lysosomal membrane permeabilization is mediated by the multifunctional sorting protein PACS-2 and repressed by the E3 ligases cIAP-1 and cIAP-2. Despite the opposing roles for PACS-2 and cIAPs in TRAIL-induced apoptosis, an interaction between these proteins has yet to be examined. Herein, we report that cIAP-1 and cIAP-2 confer TRAIL resistance to hepatobiliary cancer cell lines by reducing PACS-2 levels. Under basal conditions, PACS-2 underwent K48-linked poly-ubiquitination, resulting in PACS-2 proteasomal degradation. Biochemical assays showed cIAP-1 and cIAP-2 interacted with PACS-2 in vitro and co-immunoprecipitation studies demonstrated that the two cIAPs bound PACS-2 in vivo. More importantly, both cIAP-1 and cIAP-2 directly mediated PACS-2 ubiquitination in a cell-free assay. Single c-Iap-1 or c-Iap-2 gene knock-outs in mouse hepatocytes did not lead to PACS-2 accumulation. However, deletion of both cIAP-1 and cIAP-2 reduced PACS-2 ubiquitination, which increased PACS-2 levels and sensitized HuH-7 cells to TRAIL-induced lysosomal membrane permeabilization and apoptosis. Correspondingly, deletion of cIAPs sensitized wild-type, but not PACS-2-deficient hepatocarcinoma cells or Pacs-2-/- mouse hepatocytes to TRAIL-induced apoptosis. Together, these data suggest cIAPs constitutively downregulate PACS-2 by polyubiquitination and proteasomal degradation, thereby restraining TRAIL-induced killing of liver cancer cells.