The inhibitor of NF-kappa B ( I kappa B) family of proteins is believed to regulate NF-kappa B activity by cytoplasmic sequestration. We show that in cells depleted of I kappa B alpha, I kappa B beta and I kappa B epsilon proteins, a small fraction of p65 binds DNA and leads to constitutive activation of NF-kappa B target genes, even without stimulation, whereas most of the p65 remains cytoplasmic. These results indicate that although I kappa B alpha, I kappa B beta and I kappa B epsilon proteins could be dispensable for cytoplasmic retention of NF-kappa B, they are essential for preventing NF-kappa B dependent gene expression in the basal state. We also show that in the absence of I kappa B alpha, I kappa B beta and I kappa B epsilon proteins, cytoplasmic retention of NF-kappa B by other cellular proteins renders the pathway unresponsive to activation.