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XIAP is an important antiapoptotic protein capable of conferring resistance to cancer cells. Embelin, the small molecular inhibitor of XIAP, possesses wide spectrum of biological activities with strong inhibition of nuclear factor kappa B and downstream antiapoptotic genes. However, the mechanism of its cell death induction is not known. Our studies using colon cancer cells lacking p53 and Bax suggest that both lysosomes and mitochondria are prominent targets of embelin-induced cell death. Embelin induced cell-cycle arrest in G(1) phase through p21, downstream of p53. In the absence of p21, the cells are sensitized to death in a Bax-dependent manner. The loss of mitochondrial membrane potential induced by embelin was independent of Bax and p53, but lysosomal integrity loss was strongly influenced by the presence of p53 but not by Bax. Lysosomal role was further substantiated by enhanced cathepsin B activity noticed in embelin-treated cells. p53-dependent lysosomal destabilization and cathepsin B activation contribute for increased sensitivity of p21-deficient cells to embelin with enhanced caspase 9 and caspase 3 activation. Cathepsin B inhibitor reduced cell death and cytochrome c release in embelin-treated cells indicating lysosomal pathway as the upstream of mitochondrial death signaling. Deficiency of cell-cycle arrest machinery renders cells more sensitive to embelin with enhanced lysosomal destabilization and caspase processing emphasizing its potential therapeutic importance to address clinical drug resistance.