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X-linked Inhibitor of Apoptosis (XIAP) deficiency predisposes people to pathogen-associated hyperinflammation. Upon XIAP loss, Toll-like receptor (TLR) ligation triggers RIPK3-caspase-8-mediated IL-1β activation and death in myeloid cells. How XIAP suppresses these events remains unclear. Here, we show that TLR-MyD88 causes the proteasomal degradation of the related IAP, cIAP1, and its adaptor, TRAF2, by inducing TNF and TNF Receptor 2 (TNFR2) signaling. Genetically, we define that myeloid-specific cIAP1 loss promotes TLR-induced RIPK3-caspase-8 and IL-1β activity in the absence of XIAP. Importantly, deletion of TNFR2 in XIAP-deficient cells limited TLR-MyD88-induced cIAP1-TRAF2 degradation, cell death, and IL-1β activation. In contrast to TLR-MyD88, TLR-TRIF-induced interferon (IFN)β inhibited cIAP1 loss and consequent cell death. These data reveal how, upon XIAP deficiency, a TLR-TNF-TNFR2 axis drives cIAP1-TRAF2 degradation to allow TLR or TNFR1 activation of RIPK3-caspase-8 and IL-1β. This mechanism may explain why XIAP-deficient patients can exhibit symptoms reminiscent of patients with activating inflammasome mutations.