Soluble TRAIL (sTRAIL) can be produced by myeloid-derived cells to kill cancer cells. Whether this mechanism is used by T cells, and if so, how sTRAIL production is regulated, remains unclear. Our previous studies showed that ex vivo expanded human γδ T cells express TRAIL and NK receptor group 2 (R2), member D (NKG2D), and possess potent anticancer activities both in vitro and in vivo. Here, we investigated in greater detail the mechanisms by which γδ T cells utilize TRAIL and NKG2D to kill lung cancer cells. We demonstrate that human lung cancer cells express TRAIL R2 and NKG2D ligands. Blocking TRAIL or NKG2D during γδ T-cell-lung cancer cell co-cultures significantly reduced γδ T-cell-mediated cytotoxicity. Cross-linking NKG2D with anti-NKG2D antibody to mimic ligand binding promoted γδ T cells to produce sTRAIL, which induced apoptosis in lung cancer cells through TRAIL R2. Either neutralizing sTRAIL or blocking lung cancer cell TRAIL R2 significantly reduced γδ T-cell-mediated cytotoxicity to lung cancer cells. This study demonstrates that γδ T cells can mediate anticancer immunity via NKG2D-regulated production of sTRAIL.