The discovery of cancer cell-selective tumour necrosis factor-related apoptosis inducing ligand (TRAIL)-induced apoptosis generated broad excitement and development of TRAIL receptor agonists (TRA) as potential cancer therapy. Studies demonstrating the synergistic combination effect of SMAC mimetics and TRA further suggested potentially effective treatment in multiple tumour settings. However, predictive biomarkers allowing identification of patients that could respond to treatment are lacking. Here, we described a high throughput combination screen conducted across a panel of 31 breast cancer cell lines in which we observed highly synergistic activity between TRAIL and the inhibitors of apoptosis proteins (IAP) inhibitor (IAPi) AZD5582 in ~30% of cell lines. We detected no difference in the expression levels of the IAPi or TRAIL-targeted proteins or common modulators of the apoptotic pathway between the sensitive and resistant cell lines. Synergistic combination effect of AZD5582 and TRAIL correlated with sensitivity to TRAIL, but not to AZD5582 as a single agent. TRAIL treatment led to significantly greater activity of Caspase-8 in sensitive than in resistant cell lines (P=0.002). The majority (12/14) of AZD5582+TRAIL-resistant cell lines retained a functional cell death pathway, as they were sensitive to AZD5582+TNFα combination treatment. This suggested that failure of the TRAIL receptor complex to transduce the death signal to Caspase-8 underlies AZD5582+TRAIL resistance. We developed a 3D spheroid assay and demonstrated its suitability for the ex vivo analysis of the Caspase-8 activity as a predictive biomarker. Altogether, our study demonstrated a link between the functionality of the TRAIL receptor pathway and the synergistic activity of the IAPi+TRA combination treatment. It also provided a rationale for development of the Caspase-8 activity assay as a functional predictive biomarker that could allow better prediction of the response to IAPi+TRA-based therapies than the analysis of expression levels of protein biomarkers.