NF-kappaB activation is required for TNF-alpha-induced transformation of JB6 mouse epidermal cells. Deficient activation of p65 contributes to the lack of NF-kappaB activation in transformation-resistant (P-) cells. We hypothesized that the differential NF-kappaB activation involves differential p65 phosphorylation arising from enzyme activity differences. Here we show that TNF-alpha induces greater ERK-dependent p65 phosphorylation at S536 in transformation sensitive (P+) cells than in P- cells. Our results establish that limited ERK content contributes to a low IkappaB kinase (IKKbeta) level, in turn resulting in insufficient p65 phosphorylation at S536 upon TNF-alpha stimulation in P- cells. Phosphorylation of p65 at S536 appears to play a role in TNF-alpha-induced p65 DNA binding and recruitment of p300 to the p65 complex as well as in release of p65 bound to HDAC1 and 3. Blocking p65 phosphorylation at S536, but not at S276 or S529, abolishes p65 transactivational activity. Over-expression of p65 but not p65 phosphorylation mutant (S536A) in transformation-resistant P- cells renders these cells sensitive to TNF-alpha-induced transformation. Over-expression of p65 phosphorylation mimics p65-S536D or p65-S536E in P- cells and also rescues the transformation response. These findings provide direct evidence that phosphorylation of p65 at S536 is required for TNF-alpha-induced NF-kappaB activation in the JB6 transformation model. The lack of NF-kappaB activation seen in P- cells can be attributed to an insufficient level of p65 phosphorylation on S536 that arises from insufficient IKKbeta that in turn arises from insufficient ERK. Thus, p65 phosphorylation at S536 offers a potential molecular target for cancer prevention.