We report the discovery and characterization of SM-406 (compound 2), a potent and orally bioavailable Smac mimetic and an antagonist of the inhibitor of apoptosis proteins (IAPs). This compound binds to XIAP, cIAP1, and cIAP2 proteins with K(i) of 66.4, 1.9, and 5.1 nM, respectively. Compound 2 effectively antagonizes XIAP BIR3 protein in a cell-free functional assay, induces rapid degradation of cellular cIAP1 protein, and inhibits cancer cell growth in various human cancer cell lines. It has good oral bioavailability in mice, rats, non-human primates, and dogs, is highly effective in induction of apoptosis in xenograft tumors, and is capable of complete inhibition of tumor growth. Compound 2 is currently in phase I clinical trials for the treatment of human cancer.