Transcription factor NF-kappaB regulates the expression of a plethora of genes. The activity of NF-kappaB proteins is regulated by IkappaB proteins. We report that induction of IkappaBalpha, a member of the IkappaB family of proteins, is preceded by activation of NF-kappaB complex. The promoter of the IkappaBalpha gene contains a kappaB site that is directly involved in its induction by the NF-kappaB complex. Degradation of IkappaBalpha protein precedes activation of NF-kappaB DNA binding activity, whereas newly synthesized IkappaBalpha protein inhibits NF-kappaB activity. If the degradation of IkappaBalpha is prevented, the induction of DNA binding activity of NF-kappaB complex is severely curtailed. These data suggest the existence of an autoregulatory loop whereby IkappaBalpha regulates the activity of transcription factor NF-kappaB, which in turn regulates the IkappaBalpha activity.