PAAD domains are found in diverse proteins of unknown function and are structurally related to a superfamily of protein interaction modules that includes death domains, death effector domains, and Caspase activation and recruitment domains. Using bioinformatics strategies, cDNAs were identified that encode a novel protein of 110 kDa containing a PAAD domain followed by a putative nucleotide-binding (NACHT) domain and several leucine-rich repeat domains. This protein thus resembles Cryopyrin, a protein implicated in hereditary hyperinflammation syndromes, and was termed PAN2 for PAAD and NACHT-containing protein 2. When expressed in HEK293 cells, PAN2 suppressed NF-kappaB induction by the cytokines tumor necrosis factor-alpha (TNFalpha) and interleukin-1beta (IL-1beta), suggesting that this protein operates at a point of convergence in these two cytokine signaling pathways. This PAN2-mediated suppression of NF-kappaB was evident both in reporter gene assays that measured NF-kappaB transcriptional activity and electromobility shift assays that measured NF-kappaB DNA binding activity. PAN2 also suppressed NF-kappaB induction resulting from overexpression of several adapter proteins and protein kinases involved in the TNF or IL-1 receptor signal transduction, including TRAF2, TRAF6, RIP, IRAK2, and NF-kappaB-inducing kinase as well as the IkappaB kinases IKKalpha and IKKbeta. PAN2 also inhibited the cytokine-mediated activation of IKKalpha and IKKbeta as measured by in vitro kinase assays. Furthermore, PAN2 association with IKKalpha was demonstrated by co-immunoprecipitation assays, suggesting a direct effect on the IKK complex. These observations suggest a role for PAN2 in modulating NF-kappaB activity in cells, thus providing the insights into the potential functions of PAAD family proteins and their roles in controlling inflammatory responses.