The cytokine tumor necrosis factor alpha (TNF-alpha) induces expression of inflammatory gene networks by activating cytoplasmic to nuclear translocation of the nuclear factor-kappaB (NF-kappaB) transcription factor. NF-kappaB activation results from sequential phosphorylation and hydrolysis of the cytoplasmic inhibitor, IkappaBalpha, through the 26 S proteasome. Here, we show a parallel proteasome-independent pathway for cytokine-inducible IkappaBalpha proteolysis in HepG2 liver cells mediated by cytosolic calcium-activated neutral protease (calpains). Pretreatment with either calpain- or proteasome-selective inhibitors partially blocks up to 50% of TNF-alpha-inducible IkappaBalpha proteolysis; pretreatment with both is required to completely block IkappaBalpha proteolysis. Similarly, in transient cotransfection assays, expression of the specific inhibitor, calpastatin, partially blocks TNF-alpha-inducible NF-kappaB-dependent promoter activity and IkappaBalpha proteolysis. In TNF-alpha-stimulated cells, a rapid (within 1 min), 2.2-fold increase in cytosolic calpain proteolytic activity is measured using a specific fluorescent assay. Inducible calpain proteolytic activity occurs coincidentally with the particulate-to-cytosol redistribution of the catalytic m-calpain subunit into the IkappaBalpha compartment. Addition of catalytically active m-calpain into broken cells was sufficient to produce ligand-independent IkappaBalpha proteolysis and NF-kappaB translocation. As additional evidence for calpain-dependent IkappaBalpha proteolysis and NF-kappaB activation, we demonstrate that this process occurs in a cell line (ts20b) deficient in the ubiquitin-proteasome pathway. Following inactivation of the temperature-sensitive ubiquitin-activating enzyme, IkappaBalpha proteolysis occurs in a manner sensitive only to calpain inhibitors. Our results demonstrate that TNF-alpha activates cytosolic calpains, a parallel pathway that degrades IkappaBalpha and activates NF-kappaB activation independently of the ubiquitin-proteasome pathway.