Growing evidence suggests that NADPH oxidase (Nox)-derived reactive oxygen species (ROS) play important roles in regulating cytokine signaling. We have explored how TNF-alpha induction of Nox-dependent ROS influences NF-kappaB activation. Cellular stimulation by TNF-alpha induced NADPH-dependent superoxide production in the endosomal compartment, and this ROS was required for IKK-mediated activation of NF-kappaB. Inhibiting endocytosis reduced the ability of TNF-alpha to induce both NADPH-dependent endosomal superoxide and NF-kappaB, supporting the notion that redox-dependent signaling of the receptor occurs in the endosome. Molecular analyses demonstrated that endosomal H(2)O(2) was critical for the recruitment of TRAF2 to the TNFR1/TRADD complex after endocytosis. Studies using both Nox2 siRNA and Nox2-knockout primary fibroblasts indicated that Nox2 was critical for TNF-alpha-mediated induction of endosomal superoxide. Redox-active endosomes that form after TNF-alpha or IL-1 beta induction recruit several common proteins (Rac1, Nox2, p67(phox), SOD1), while also retaining specificity for ligand-activated receptor effectors. Our studies suggest that TNF-alpha and IL-1 beta signaling pathways both can use Nox2 to facilitate redox activation of their respective receptors at the endosomal level by promoting the redox-dependent recruitment of TRAFs. These studies help to explain how cellular compartmentalization of redox signals can be used to direct receptor activation from the plasma membrane.