The induction of immunoglobulin kappa light chain expression in 70Z/3 pre-B cells treated with bacterial lipopolysaccharide (LPS) requires the activation of the B cell-specific factor NF-kappa B, which binds to the kappa enhancer motif, GGGACTTTCC. This sequence alone can function as a tissue-specific enhancer for LPS-induced gene expression. A potent inhibitor of B lymphopoiesis [transforming growth factor-beta (TGF-beta)] was used to explore the mechanisms in the activation of kappa transcription by LPS and by interferon-gamma (IFN-gamma). TGF-beta inhibited LPS-induced kappa transcription but not the activation and in vitro binding of NF-kappa B. This indicates that NF-kappa B activation, while necessary, is not sufficient for LPS-induced kappa transcription. TGF-beta had no effect on IFN-gamma-induced kappa transcription, and NF-kappa B was not activated by IFN-gamma. These results reveal that LPS and IFN-gamma activate transcription through different mechanisms.