Although TRAIL is considered a potential anti-cancer agent, it enhances tumor progression by activating NF-κB in apoptosis-resistant cells. cFLIP overexpression and caspase-8 activation have been implicated in TRAIL-induced NF-κB activation; however, the underlying mechanisms are unknown. Here, we report that caspase-8-dependent cleavage of RIP1 in the kinase (KD) and intermediate (ID) domains determines the activation state of the NF-κB pathway in response to TRAIL treatment. In apoptosis-sensitive cells, caspase-8 cleaves RIP1 in the KD and ID domains immediately after the recruitment of RIP1 to the receptor complex, impairing IKK recruitment and NF-κB activation. In apoptosis-resistant cells, cFLIP restricts caspase-8 activity, resulting in limited RIP1 cleavage and generation of a KD-cleaved fragment capable of activating NF-κB but not apoptosis. Notably, depletion of the cytoplasmic pool of TRAF2 and cIAP1 in lymphomas by CD40 ligation inhibits basal RIP1 ubiquitination, but does not prompt cell death, due to CD40L-induced cFLIP expression and limited RIP1 cleavage. Inhibition of RIP1 cleavage at the KD suppresses NF-κB activation and cell-survival even in cFLIP-overexpressing lymphomas. Importantly, RIP1 is constitutively cleaved in human and mouse lymphomas, suggesting that cFLIP-mediated and caspase-8-dependent limited cleavage of RIP1 is a new layer of mechanism that promotes NF-κB activation and lymphoma survival.