The interferon regulatory factor 1 (IRF-1) acts as a transcriptional inducer of the interferon beta (IFN-beta) gene and interferon-stimulated genes. Here we report that IRF-1-mediated IFN-beta induction depends on NFkappaB activity. IRF-1 by itself initiates NFkappaB activation by inducing a reduction in cellular MAD3/IkappaBalpha, an inhibitor of NFkappaB. After nuclear translocation, NFkappaB synergizes with IRF-1 on the cis-elements positive regulatory domain (PRD)II and PRDI/III to induce transcription of the IFN-beta gene. In contrast with IFN-beta transcription induced by dsRNA or virus, c-Jun/ATF-2 binding to PRDIV is not involved. Recombinant MAD3/IkappaBalpha is phosphorylated in vitro by extracts from IRF-1-expressing cells. IRF-1-dependent MAD3/IkappaBalpha degradation is not detectable in cells expressing a dominant negative mutant of the protein kinase PKR, suggesting that PKR mediates MAD3/IkappaBalpha degradation.