Lack of cellular differentiation is a key feature of nasopharyngeal carcinoma (NPC), but it also presents as a unique opportunity for intervention by differentiation therapy. Here using RNA-seq profiling analysis and functional assays, we demonstrate that reduced IKKα expression is responsible for the undifferentiated phenotype of NPC. Conversely, overexpression of IKKα induces differentiation and reduces tumorigenicity of NPC cells without activating NF-κB signalling. Importantly, we describe a mechanism whereby EZH2 directs IKKα transcriptional repression via H3K27 histone methylation on the IKKα promoter. The differentiation agent, retinoic acid, increases IKKα expression by suppressing EZH2-mediated H3K27 histone methylation, resulting in enhanced differentiation of NPC cells. In agreement, an inverse correlation between IKKα (low) and EZH2 (high) expression is associated with a lack of differentiation in NPC patient samples. Collectively, these findings demonstrate a role for IKKα in NPC differentiation and reveal an epigenetic mechanism for IKKα regulation, unveiling a new avenue for differentiation therapy.