Euthyroid sick syndrome, characterized by low serum 3,5, 3'-triiodothyronine (T(3)) with normal L-thyroxine levels, is associated with a wide variety of disorders including sepsis, malignancy, and AIDS. The degree of low T(3) in circulation has been shown to correlate with the severity of the underlying disorders and with the prognosis. Elevated TNF-alpha levels, which accompany severe illness, are associated with decreased activity of type I 5'-deiodinase (5'-DI) in liver, leading us to speculate that high levels of this factor contribute to euthyroid sick syndrome. Here we demonstrate that the activation of NF-kappa B by TNF-alpha interferes with thyroid-hormone action as demonstrated by impairment of T(3)-dependent induction of 5'-DI gene expression in HepG2 cells. Inhibition of NF-kappa B action by a dominant-negative NF-kappa B reversed this effect and allowed T(3) induction of 5'-DI. Furthermore, we show that an inhibitor of NF-kappa B activation, clarithromycin (CAM), can inhibit TNF-alpha-induced activation of NF-kappa B and restore T(3)-dependent induction of 5'-DI mRNA and enzyme activity. These results suggest that NF-kappa B activation by TNF-alpha is involved in the pathogenesis of euthyroid sick syndrome and that CAM could help prevent a decrease in serum T(3) levels and thus ameliorate euthyroid sick syndrome.