PPARs are ligand-activated transcription factors that regulate energy homeostasis. In addition, PPARs furthermore control the inflammatory response by antagonizing the nuclear factor-κB (NF-κB) signaling pathway. We recently demonstrated that PPARα activators increase IκBα mRNA and protein levels in human aortic smooth muscle cells. Here, we studied the molecular mechanisms by which PPARα controls IκBα expression. Using transient transfection assays, it is demonstrated that PPARα potentiates p65-stimulated IκBα transcription in a ligand-dependent manner. Site-directed mutagenesis experiments revealed that PPARα activation of IκBα transcription requires the NF-κB and Sp1 sites within IκBα promoter. Chromatin immunoprecipitation assays demonstrate that PPARα activation enhances the occupancy of the NF-κB response element in IκBα promoter in vivo. Overexpression of the oncoprotein E1A failed to inhibit PPARα-mediated IκBα promoter induction, suggesting that cAMP response element binding protein-binding protein/p300 is not involved in this mechanism. By contrast, a dominant-negative form of VDR-interacting protein 205 (DRIP205) comprising its two LXXLL motifs completely abolished PPARα ligand-mediated activation. Furthermore, cotransfection of increasing amounts of DRIP205 relieved this inhibition, suggesting that PPARα requires DRIP205 to regulate IκBα promoter activity. By contrast, DRIP205 is not involved in PPARα-mediated NF-κB transcriptional repression. Taken together, these data provide a molecular basis for PPARα-mediated induction of IκBα and demonstrate, for the first time, that PPARα may positively regulate gene transcription in the absence of functional PPAR response elements.