Caspase-8 is the initiator caspase of the extrinsic apoptosis pathway and also has a role in non-apoptotic physiologies. Identifying endogenous substrates for caspase-8 by using integrated bioinformatics and biological approaches is required to delineate the diverse roles of this caspase. We describe a number of novel putative caspase-8 substrates using the Prediction of Protease Specificity (PoPS) program, one of which is histone deacetylase 7 (HDAC7). HDAC7 is cleaved faster than any other caspase-8 substrate described to date. It is also cleaved in primary CD4+CD8+ thymocytes undergoing extrinsic apoptosis. By using naturally occurring caspase inhibitors that have evolved exquisite specificity at concentrations found within the cell, we could unequivocally assign the cleavage activity to caspase-8. Importantly, cleavage of HDAC7 alters its subcellular localization and abrogates its Nur77 repressor function. Thus we demonstrate a direct role for initiator caspase-mediated proteolysis in promoting gene transcription.