The adaptor and signaling proteins TRAF2, TRAF3, cIAP1 and cIAP2 may inhibit alternative nuclear factor-kappaB (NF-kappaB) signaling in resting cells by targeting NF-kappaB-inducing kinase (NIK) for ubiquitin-dependent degradation, thus preventing processing of the NF-kappaB2 precursor protein p100 to release p52. However, the respective functions of TRAF2 and TRAF3 in NIK degradation and activation of alternative NF-kappaB signaling have remained elusive. We now show that CD40 or BAFF receptor activation result in TRAF3 degradation in a cIAP1-cIAP2- and TRAF2-dependent way owing to enhanced cIAP1, cIAP2 TRAF3-directed ubiquitin ligase activity. Receptor-induced activation of cIAP1 and cIAP2 correlated with their K63-linked ubiquitination by TRAF2. Degradation of TRAF3 prevented association of NIK with the cIAP1-cIAP2-TRAF2 ubiquitin ligase complex, which resulted in NIK stabilization and NF-kappaB2-p100 processing. Constitutive activation of this pathway causes perinatal lethality and lymphoid defects.