REIC/Dickkopf-3 (Dkk-3), a tumor suppressor gene, has been investigated in gene therapy studies. Our previous study suggested that REIC/Dkk-3-induced apoptosis mainly resulted from phosphorylation of c-Jun-NH2 kinase (JNK) in prostate cancer cells. However, the precise mechanisms, especially the molecular mechanisms regulating JNK phosphorylation, remain unclear. In this study, we investigated the mechanisms participating in JNK phosphorylation in the context of a refractory cancer disease, malignant mesothelioma (MM). Adenovirus-mediated overexpression of REIC/Dkk-3 induced apoptosis mainly through JNK activation in immortalized MM cells (211H cells). Interestingly, transcriptional down-regulation of inhibition of differentiation-1 (Id-1) was detected in REIC/Dkk-3-overexpressed 211H cells. Moreover, restoration of Id-1 expression antagonized REIC/Dkk-3-induced JNK phosphorylation and apoptosis. Mutagenesis experiments with the 2.1-kb human Id-1 promoter revealed that activating transcription factor 3 (ATF3) and Smad interaction, with their respective binding motifs, was essential for REIC/Dkk-3-mediated suppression of Id-1 promoter activity. ATF3 activation was probably induced by endoplasmic reticulum stress. Finally, we showed strong antitumor effects from REIC/Dkk-3 gene transfer into the pleural cavity in an orthotopic MM mouse model. Relative to control tumor tissue, REIC/Dkk-3-treated tumor tissue showed down-regulated expression of Id-1 mRNA, enhanced expression of phosphorylated JNK, and an increased number of apoptotic cells. In summary, we first showed that both ATF3 and Smad were crucially and synergistically involved in down-regulation of Id-1, which regulated JNK phosphorylation in REIC/Dkk-3-induced apoptosis. Thus, gene therapy with REIC/Dkk-3 may be a promising therapeutic tool for MM. [Cancer Res 2008;68(20):8333-41]