IkappaB proteins regulate ReI/NF-kappaB transcription complexes through a direct protein-protein interaction. In addition, we have previously shown that certain IkappaB proteins (IkappaBalpha and IkappaBgamma) can act as activators of transcription when fused to the DNA-binding domain of GAL4. We now show that a mutant chicken IkappaBalpha protein that cannot interact with ReI proteins in vitro did not activate transcription when fused to GAL4 in chicken embryo fibroblasts (CEF) and Saccharomyces cerevisiae, and did not inhibit growth in yeast; in contrast, an IkappaBalpha mutant that can still interact in vitro with ReI proteins activated transcription in both CEF and yeast and inhibited growth in yeast. In CEF, GAL4-IkappaBalpha mediated transcription activation was inhibited by co-transfection with an expression vector for a RelA (p65) protein that contained sequences needed for interaction with IkappaBalpha but that was deleted of its transcription activation domain. Therefore, it appears that GAL4-IkappaBalpha activates transcription by interacting with an endogenous ReI family protein in CEF. In contrast, the activation domain from IkappaBgamma behaved as a genuine acidic activator of transcription and did not inhibit growth when expressed in yeast. Since transcription activation and growth inhibition by GAL4-IkappaBalpha mutants in yeast correlated with their ability to interact with vertebrate ReI proteins, our results suggest that these activities of GAL4-IkappaBalpha are mediated through interaction with a ReI-like protein in yeast, which is important for cell growth.