Tumor necrosis factor-alpha (TNF-alpha) and Fas ligand induce apoptosis by interacting with their corresponding membrane-bound death receptors and activating caspases. Since both systems share several components of the intracellular apoptotic cascade and are expressed by first trimester trophoblasts, it is unknown how these cells remain resistant to Fas ligand while sensitive to TNF-alpha. XAF1 (X-linked inhibitor of apoptosis (XIAP)-associated factor 1) is a proapoptotic protein that antagonizes the caspase-inhibitory activity of XIAP. Here, we demonstrated that XAF1 functions as an alternative pathway for TNF-alpha-induced apoptosis by translocating to the mitochondria and promoting XIAP inactivation. In addition, we showed that the overexpression of XAF1 sensitized first trimester trophoblast cells to Fas-mediated apoptosis. Furthermore, we also determined that the differential expression of XAF1 in first and third trimester trophoblast cells was due to changes in XAF1 gene methylation. Our results establish a novel regulatory pathway controlling trophoblast cell survival and provide a molecular mechanism to explain trophoblast sensitivity to TNF-alpha and the increased number of apoptotic trophoblast cells observed near term. Aberrant XAF1 expression and/or localization may have consequences for normal pregnancy outcome.