The capacity of tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) to selectively induce cell death in malignant cells triggered numerous attempts for therapeutic exploitation. In clinical trials, however, TRAIL did not live up to the expectations, as tumors exhibit high rates of TRAIL resistance in vivo. Response to anti-cancer therapy is determined not only by cancer cell intrinsic factors (e.g. oncogenic mutations), but also modulated by extrinsic factors such as the hypoxic tumor microenvironment.Here, we address the effect of hypoxia on pro-apoptotic TRAIL signaling in colorectal cancer cells. We show that oxygen levels modulate susceptibility to TRAIL-induced cell death, which is severely impaired under hypoxia (0.5% O2). Mechanistically, this is attributable to hypoxia-induced mitochondrial autophagy. Loss of mitochondria under hypoxia restricts the availability of mitochondria-derived pro-apoptotic molecules such as second mitochondria-derived activator of caspase (SMAC), thereby disrupting amplification of the apoptotic signal emanating from the TRAIL death receptors and efficiently blocking cell death in type-II cells. Moreover, we identify strategies to overcome TRAIL resistance in low oxygen environments. Counteracting hypoxia-induced loss of endogenous SMAC by exogenous substitution of SMAC mimetics fully restores TRAIL sensitivity in colorectal cancer cells. Alternatively, enforcing a mitochondria-independent type-I mode of cell death by targeting the type-II phenotype gatekeeper X-linked inhibitor of apoptosis protein (XIAP) is equally effective.Together, our results indicate that tumor hypoxia impairs TRAIL efficacy but this limitation can be overcome by combining TRAIL with SMAC mimetics or XIAP-targeting drugs. Our findings may help to exploit the potential of TRAIL in cancer therapy.