The C-terminal half of the p105 precursor of the NF-kappa B p50 subunit contains ankyrin-like repeats similar to those in I kappa B molecules, which are known to retain NF-kappa B complexes in the cytoplasm. We demonstrate that in various cell lines p105 is found associated with either c-rel or p65 in the cytoplasm and serves I kappa B-like functions. p105 retains c-rel or p65 in the cytoplasm in cotransfection experiments in COS cells. It also inhibits DNA binding by c-rel in gel retardation assays. Stable interaction of p105 with c-rel or p65 requires the putative dimerization domain in the conserved rel homology region of p105, as well as a second contact with the I kappa B-related C-terminal part of p105. Pulse-chase experiments indicate that cytoplasmic complexes of p105 with c-rel or p65 give rise to cytoplasmic as well as nuclear p50-c-rel and p50-p65, respectively, probably through processing of p105. Thus, p105, like the I kappa Bs, controls the subcellular localization and hence the transcriptional activity of at least two other members of the rel/NF-kappa B family.