After exposure of cellsAfter exposure of cells to tumor necrosis factor (TNF), IκBα is rapidly degraded by a proteolytic activity that is required for nuclear localization and activation of transcription factor NF-κB. To investigate this problem, we have developed a cell-free system to study the degradation of IκBα initiated in vivo. In this in vitro system, characteristics of endogenous IκBα degradation were comparable to those observed in vivo. Recombinant IκBα, when added to lysates from cells exposed to TNF, was specifically degraded by a cellular proteolytic activity; however, it was stable in extracts from unstimulated cells. Inhibition characteristics of the proteolytic activity responsible for IκBα degradation suggest the involvement of a serine protease. Analysis of mutated forms of IκBα in the in vitro system demonstrated that an IκBα species which was unable to interact with NF-κB was still efficiently degraded. In contrast, deletion of the C-terminal 61 amino acids from IκBα rendered the protein resistant to proteolytic degradation. Expression of IκBα mutated forms in COS-7 cells confirmed the importance of the C-terminal domain for the degradation of the protein in vivo following cell activation. Thus, it is likely that the acidic, negatively charged region represented by the C-terminal 61 amino acids of the protein contains residues critical for TNF-inducible degradation of IκBα.