During endoplasmic reticulum (ER) stress, homeostatic signaling through the unfolded protein response (UPR) augments ER protein-folding capacity. If homeostasis is not restored, the UPR triggers apoptosis. We found that the ER transmembrane kinase/endoribonuclease (RNase) IRE1α is a key component of this apoptotic switch. ER stress induces IRE1α kinase autophosphorylation, activating the RNase to splice XBP1 mRNA and produce the homeostatic transcription factor XBP1s. Under ER stress—or forced autophosphorylation—IRE1α's RNase also causes endonucleolytic decay of many ER-localized mRNAs, including those encoding chaperones, as early events culminating in apoptosis. Using chemical genetics, we show that kinase inhibitors bypass autophosphorylation to activate the RNase by an alternate mode that enforces XBP1 splicing and averts mRNA decay and apoptosis. Alternate RNase activation by kinase-inhibited IRE1α can be reconstituted in vitro. We propose that divergent cell fates during ER stress hinge on a balance between IRE1α RNase outputs that can be tilted with kinase inhibitors to favor survival.