Nuclear expression and consequent biological action of the eukaryotic NF-kappa B transcription factor complex are tightly regulated through its cytoplasmic retention by an ankyrin-rich inhibitory protein termed I kappa B alpha. I kappa B alpha specifically binds to and masks the nuclear localization signal of the RelA subunit of NF-kappa B, thereby effectively sequestering this transcription factor complex in the cytoplasm. Specific cellular activation signals lead to the rapid proteolytic degradation of I kappa B alpha and the concomitant nuclear translocation of NF-kappa B. However, the precise biochemical mechanisms underlying the inhibitory effects of I kappa B alpha on RelA and its inducible pattern of degradation remain unclear. By using HeLa cells transfected with various cDNAs end-coding epitope-tagged mutants of I kappa B alpha, our studies demonstrate the following: (i) sequences within the 72-amino-acid N-terminal region of I kappa B alpha are required for tumor necrosis factor alpha (TNF-alpha)-induced degradation but are fully dispensable for I kappa B alpha binding to and inhibition of RelA; (ii) serine residues located at positions 32 and 36 within the N-terminal region of I kappa B alpha represent major sites of induced phosphorylation (substitution of these serine residues with alanine abrogates TNF-alpha-induced degradation of I kappa B alpha); (iii) the C-terminal 40 residues of I kappa B alpha (amino acids 277 to 317), which include a PEST-like domain, are entirely dispensable for TNF-alpha-induced degradation and inhibition of RelA; (iv) a glutamine- and leucine-rich (QL) region of I kappa B alpha located between residues 263 and 277 and overlapping with the sixth ankyrin repeat is required for both inducible degradation and inhibition of RelA function; (v) regulation of I kappa B alpha degradation by this QL-rich region appears to occur independently of phosphorylation at serines 32 and 36. These findings thus indicate that I kappa B alpha is generally organized within distinct modular domains displaying different functional and regulatory properties. These studies have also led to the identification of a novel class of dominant-negative I kappa B alpha molecules that retain full inhibitory function on NF-kappa B yet fail to undergo stimulus-induced degradation. These molecules, which lack N-terminal sequences, potently inhibit TNF-alpha-induced activation of the human immune deficiency virus type 1 kappa B enhancer, thus indicating their possible use as general inhibitors of NF-kappa B.