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The active nuclear form of the NF-kappa B transcription factor complex is composed of two DNA binding subunits, NF-kappa B p65 and NF-kappa B p50, both of which share extensive N-terminal sequence homology with the v-rel oncogene product. The NF-kappa B p65 subunit provides the transactivation activity in this complex and serves as an intracellular receptor for a cytoplasmic inhibitor of NF-kappa B, termed I kappa B. In contrast, NF-kappa B p50 alone fails to stimulate kappa B-directed transcription, and based on prior in vitro studies, is not directly regulated by I kappa B. To investigate the molecular basis for the critical regulatory interaction between NF-kappa B and I kappa B/MAD-3, a series of human NF-kappa B p65 mutants was identified that functionally segregated DNA binding, I kappa B-mediated inhibition, and I kappa B-induced nuclear exclusion of this transcription factor. Results from in vivo expression studies performed with these NF-kappa B p65 mutants revealed the following: 1) I kappa B/MAD-3 completely inhibits NF-kappa B p65-dependent transcriptional activation mediated through the human immunodeficiency virus type 1 kappa B enhancer in human T lymphocytes, 2) the binding of I kappa B/MAD-3 to NF-kappa B p65 is sufficient to retarget NF-kappa B p65 from the nucleus to the cytoplasm, 3) selective deletion of the functional nuclear localization signal present in the Rel homology domain of NF-kappa B p65 disrupts its ability to engage I kappa B/MAD-3, and 4) the unique C-terminus of NF-kappa B p65 attenuates its own nuclear localization and contains sequences that are required for I kappa B-mediated inhibition of NF-kappa B p65 DNA binding activity. Together, these findings suggest that the nuclear localization signal and transactivation domain of NF-kappa B p65 constitute a bipartite system that is critically involved in the inhibitory function of I kappa B/MAD-3. Unexpectedly, our in vivo studies also demonstrate that I kappa B/MAD-3 binds directly to NF-kappa B p50. This interaction is functional as it leads to retargeting of NF-kappa B p50 from the nucleus to the cytoplasm. However, no loss of DNA binding activity is observed, presumably reflecting the unique C-terminal domain that is distinct from that present in NF-kappa B p65.

I kappa B/MAD-3 masks the nuclear localization signal of NF-kappa B p65 and requires the transactivation domain to inhibit NF-kappa B p65 DNA binding.