A novel member of the IκB family has been identified as a protein that associated with the p50 subunit of NF-κB in a yeast two-hybrid screen. Similar to previously known IκB proteins, this member, IκB epsilon, has six consecutive ankyrin repeats. IκBε mRNA is widely expressed in different human tissues, with highest levels in spleen, testis, and lung. IκBε interacts with different NF-κB proteins, including p65 (RelA), c-Rel, p50, and p52, in vitro and in vivo and inhibits the DNA-binding activity of both p50-p65 and p50–c-Rel complexes effectively. Endogenous and transfected NF-κB (RelA-dependent) transcriptional activation is inhibited by IκB epsilon. IκBε mRNA is expressed at different levels in specific cell types and is synthesized constitutively in transformed B-cell lines. It also displays differential induction in response to tumor necrosis factor alpha, interleukin-1, or phorbol ester stimulation compared to IκBα in non-B-cell lines. Therefore, IκBε represents a novel IκB family member which provides an alternative mechanism for regulation of NF-kappaB-dependent transcription.