NF-κB is a major inducible transcription factor in many immune and inflammatory reactions. Its activation involves the dissociation of the inhibitory subunit 1κB from cytoplasmic NF-κB/Rel complexes, following which the Rel proteins are translocated to the nucleus, where they bind to DNA and activate transcription. Phosphorylation of 1κB in cell-free experiments results in its inactivation and release from the Rel complex, but in vivo NF-κB activation is associated with IκB degradation. in vivo phosphorylation of IκBα was demonstrated in several recent studies, but its role is unknown. Our study shows that the T-cell activation results in rapid phosphorylation of IκBα and that this event is a physiological one, dependent on appropriate lymphocyte costimulation. Inducible IκBα phosphorylation was abolished by several distinct NF-κB blocking reagents, suggesting that it plays an essential role in the activation process. However, the in vivo induction of IκBα phosphorylation did not cause the inhibitory subunit to dissociate from the Rel complex. We identified several protease inhibitors which allow phosphorylation of IκBα but prevent its degradation upon cell stimulation, presumably through inhibition of the cytoplasmic proteasome. In the presence of these inhibitors, phosphorylated IκBα remained bound to the Rel complex in the cytoplasm for an extended period of time, whereas NF-κB activation was abolished. It appears that activation of NF-κB requires degradation of IκBα while it is a part of the Rel cytoplasmic complex, with inducible phosphorylation of the inhibitory subunit influencing the rate of degradation.