The potent transcriptional activities of Rel/NF-κB proteins are regulated in the cytoplasm and nucleus by the inhibitor, IκBα. The mechanism, by which IκBα can either sequester NF-κB in the cytoplasm or act as a nuclear post-induction repressor of NF-κB, is uncertain. We find that IκBα shuttles continuously between the nucleus and cytoplasm. This shuttling requires a previously unidentified CRM1-dependent nuclear export signal (NES) located within the N-terminal domain of IκBα at amino acids 45–55. Deletion or mutation of the N-terminal NES results in nuclear localization of IκBα. NF-κB (p65) association with IκBα affects steady-state localization but does not inhibit its shuttling. Endogenous complexes of IκBα–NF-κB shuttle and will accumulate in the nucleus when CRM1 export is blocked. We find TNFα can activate the nuclear IκBα–NF-κB complexes by the classical mechanism of proteasome-mediated degradation of IκBα. These studies reveal a more dynamic nucleocytoplasmic distribution for IκBα and NF-κB suggesting previously unknown strategies for regulating this ubiquitous family of transcription activators.