The eukaryotic transcription factor NF-κB plays a central role in the induced expression of human immunodeficiency virus type 1 and in many aspects of the genetic program mediating normal T-cell activation and growth. The nuclear activity of NF-κB is tightly regulated from the cytoplasmic compartment by an inhibitory subunit called IκBα. This cytoplasmic inhibitor is rapidly phosphorylated and degraded in response to a diverse set of NF-κB-inducing agents, including T-cell mitogens, proinflammatory cytokines, and viral trans-activators such as the Tax protein of human T-cell leukemia virus type 1. To explore these IκBα-dependent mechanisms for NF-κB induction, we identified novel mutants of IκBα that uncouple its inhibitory and signal-transducing functions in human T lymphocytes. Specifically, removal of the N-terminal 36 amino acids of IκBα failed to disrupt its ability to form latent complexes with NF-κB in the cytoplasm. However, this deletion mutation prevented the induced phosphorylation, degradative loss, and functional release of IκBα from NF-κB in Tax-expressing cells. Alanine substitutions introduced at two serine residues positioned within this N-terminal regulatory region of IκBα also yielded constitutive repressors that escaped from Tax-induced turnover and that potently inhibited immune activation pathways for NF-κB induction, including those initiated from antigen and cytokine receptors. In contrast, introduction of a phosphoserine mimetic at these sites rectified this functional defect, a finding consistent with a causal linkage between the phosphorylation status and proteolytic stability of this cytoplasmic inhibitor. Together, these in vivo studies define a critical signal response domain in IκBα that coordinately controls the biologic activities of IκBα and NF-κB in response to viral and immune stimuli.