The inhibitor of apoptosis (IAP) proteins potently inhibit the catalytic activity of caspases. While profound insight into the inhibition of the effector caspases has been gained in recent years, the mechanism of how the initiator caspase-9 is regulated by IAPs remains enigmatic. This paper reports the crystal structure of caspase-9 in an inhibitory complex with the third baculoviral IAP repeat (BIR3) of XIAP at 2.4 Å resolution. The structure reveals that the BIR3 domain forms a heterodimer with a caspase-9 monomer. Strikingly, the surface of caspase-9 that interacts with BIR3 also mediates its homodimerization. We demonstrate that monomeric caspase-9 is catalytically inactive due to the absence of a supporting sequence element that could be provided by homodimerization. Thus, XIAP sequesters caspase-9 in a monomeric state, which serves to prevent catalytic activity. These studies, in conjunction with other observations, define a unified mechanism for the activation of all caspases.