Processing of the p105 precursor to generate the p50 subunit of the nuclear factor kappaB transcription factor is an exceptional case in which the ubiquitin system is involved in Limited processing rather than in complete destruction of the target substrate. A Gly-rich region "stop" signal in the middle of the molecule along with a neighboring downstream ubiquitination, and probably an E3 anchoring domain, have been demonstrated to be important for processing In addition, we have shown that I kappaB kinase-mediated phosphorylation of the C-terminal domain leads to recruitment of the SCFbeta -TrCP ubiquitin ligase with subsequent accelerated ubiquitination and processing/degradation of the precursor (Orian, A, Gonen, H., Bercovich, B,, Fajerman, I., Eytan, E., Israel, A, Mercurio, F,, Iwai, K, Schwartz, A. L., and Ciechanover, A. (2000) EMBO J. 19, 2580-2591), Here we show that processing of p105 molecules that contain more then four ankyrin repeats, but lack the C-terminal phosphorylation/ubiquitin ligase binding domain, is strongly inhibited by docked p50 subunits, Inhibition is caused by interference with the function of the proteasome, as conjugation is not affected. Inhibition is alleviated after I kappaB kinase phosphorylation of the C-terminal domain leads to accelerated, beta -TrCP-mediated ubiquitination and processing/degradation of p105. We suggest that under basal conditions, slow generation of p50 probably involves the mid molecule ubiquitination/E3 recognition motif. Following stimulation, the C-terminal domain is involved in rapid processing/degradation of p105 with release of a large amount of the stored subunits that now become transcriptionally active.