Nuclear factor kappaB (NF-kappaB)-inducing kinase (NIK) participates in the activation of NF-kappaB, a family of eukaryotic transcription factors that mediate cell growth and transformation. NIK activates the IkappaB kinase both in vivo and in vitro, although how the activity of NIK is regulated has remained unclear. Here we show that the N-terminal region of NIK contains a negative-regulatory domain (NRD), which is composed of a basic motif and a proline-rich repeat motif. Deletion of these motifs leads to a marked enhancement of NIK function. We further demonstrate that the N-terminal NRD interacts with the C-terminal region of NIK, thereby inhibiting the binding of NIK to its substrate IkappaB kinase. Consistently, when expressed alone, the NRD potently inhibits NIK-mediated NF-kappaB signaling. These results provide a new insight into the mechanism of NIK regulation.