Here we report the identification and characterization of a novel protein, RelA-associated inhibitor (RAI), that binds to the NF-kappaB subunit p65 (RelA) and inhibits its transcriptional activity. RAI gene was isolated in a yeast two-hybrid screen using the central region of p65 as bait. We confirmed the physical interaction in vitro using recombinant proteins as well as in vivo by immunoprecipitation/Western blot assay. RAI gene encodes a protein with homology to the C-terminal region of 53BP2 containing four consecutive ankyrin repeats and an Src homology 3 domain. RAI mRNA was preferentially expressed in human heart, placenta, and prostate. Despite its similarity to 53BP2, RAI did not interact with p53 in a yeast two-hybrid assay. RAI inhibited the action of NF-kappaB p65 but not that of p53 in transient luciferase gene expression assays. Similarly, RAI inhibited the endogenous NF-kappaB activity induced by tumor necrosis factor-alpha. RAI specifically inhibited the DNA binding activity of p65 when co-transfected in 293 cells. RAI protein appeared to be located in the nucleus and colocalized with NF-kappaB p65 that was activated by TNF-alpha. These observations indicate that RAI is another inhibitor of NF-kappaB in addition to IkappaB proteins and may confer an alternative mechanism of regulation.