FAT10 is a ubiquitin-like protein that is encoded in the major histocompatibility complex class I locus and is synergistically inducible with interferon-gamma and tumor necrosis factor alpha. The molecule consists of two ubiquitin-like domains in tandem arrangement and bears a conserved diglycine motif at its carboxyl terminus commonly used in ubiquitin-like proteins for isopeptide linkage to conjugated proteins. We investigated the function of FAT10 by expressing murine FAT10 in a hemagglutinin-tagged wild type form as well as a diglycine-deficient mutant form in mouse fibroblasts in a tetracycline-repressible manner. FAT10 expression did not affect major histocompatibility complex class I cell surface expression or antigen presentation. However, we found that wild type but not mutant FAT10 caused apoptosis within 24 h of induction in a caspase-dependent manner as indicated by annexin V cell surface staining and DNA fragmentation. Wild type FAT10, but not its diglycine mutant, was covalently conjugated to thus far unidentified proteins, indicating that specific FAT10 activating and conjugating enzymes must be operative in unstimulated fibroblasts. Because FAT10 expression causes apoptosis and is inducible with tumor necrosis factor alpha, it may be functionally involved in the programmed cell death mediated by this cytokine.