Inhibitor of apoptosis proteins (IAPs) regulate apoptosis primarily by inhibiting caspase-family proteases. However, many IAPs also possess E3 ligase (ubiquitin-protein isopeptide ligase) activities implicated in both caspase-dependent and -independent functions of these proteins. Here, we compared the structural features of cIAP1 responsible for its interactions with two known target proteins, TRAF2 and SMAC. The N-terminal (BIR1) and C-terminal (BIR3) BIR domains of cIAP1 were determined to be necessary and sufficient for binding TRAF2 and SMAC, respectively. Mutational analysis of the BIR1 and BIR3 domains identified critical residues required for TRAF2 and SMAC binding. Using these mutants, cIAP1-mediated ubiquitination of TRAF2 and SMAC in vitro was determined to be correspondingly dependent on intact binding sites on BIR1 and BIR3. Because TRAF2 regulates NF-kappaB activation, the effects of cIAP1 on TRAF2-mediated induction of NF-kappaB transcriptional activity were studied using reporter gene assays. Expression of a fragment of cIAP1 encompassing the three BIR domains (but not full-length cIAP1) greatly enhanced TRAF2-induced increases in NF-kappaB activity, providing a convenient assay for monitoring BIR-dependent effects of cIAP1 on TRAF2 in cells. BIR1 mutants of the BIR1-3 fragment of cIAP1 that failed to bind TRAF2 lost the ability to modulate NF-kappaB activity, demonstrating a requirement for BIR1-mediated interactions with TRAF2. Altogether, these findings demonstrate the modularity and diversification of BIR domains, showing that a single cIAP can direct its E3 ligase activity toward different substrates and can alter the cellular functions of different protein targets in accordance with differences in the specificity of individual BIR domains.