Genes encoding apoptosis-inducing proteins are postulated to be candidate tumour suppressors. The identification of such proteins may benefit the early diagnosis and therapy of tumours. In the present study, we characterized the function of a novel human BMSC (bone marrow stromal cell)-derived protein {IPP5 [inhibitor-5 of PP1 (protein phosphatase 1)]} by large-scale random sequencing of a human BMSC cDNA library. hIPP5 (human IPP5) cDNA encodes a protein of 116 amino acid residues, which shares high homology with human PPI-1 (inhibitor-1 of PP1). The effect of IPP5 on apoptosis and the underlying molecular mechanisms were investigated by overexpression of IPP5 in HeLa cells, a human cervical carcinoma cell line. Our results showed that overexpression of active mutant IPP5 inhibited anchorage-dependent growth and induced apoptosis in HeLa cells, which may be attributed to the up-regulation of p21(waf/cip1) (a 21 kDa cell-cycle regulatory protein), p53 and Bcl-2-antagonist/killer, and down-regulation of Bcl-2 and Bcl-X(L). We also showed that the expression of active mutant IPP5 in HeLa cells was further enhanced on TNF (tumour necrosis factor) treatment and overexpression of active mutant IPP5 sensitized HeLa cells to TNF-induced JNK (c-Jun N-terminal kinase) and p38 activation as well as TNF-mediated apoptosis. Thus overexpression of active mutant IPP5 may increase cell susceptibility to TNF-induced apoptosis by the activation of p38 and JNK pathways. In addition, IPP5 active mutant could interact with PP1alpha as demonstrated by the co-precipitation assay.