The transcription factor NF-κB is sequestered in the cytoplasm in a complex with IκB. Almost all NF-κB activation pathways converge on IκB kinase (IKK), which phosphorylates IκB resulting in Lys 48-linked polyubiquitination of IκB and its degradation. This allows migration of NF-κB to the nucleus where it regulates gene expression. IKK has two catalytic subunits, IKKα and IKKβ, and a regulatory subunit, IKKγ or NEMO. NEMO is essential for NF-κB activation, and NEMO dysfunction in humans is the cause of incontinentia pigmenti and hypohidrotic ectodermal dysplasia and immunodeficiency (HED–ID). The recruitment of IKK to occupied cytokine receptors, and its subsequent activation, are dependent on the attachment of Lys 63-linked polyubiquitin chains to signalling intermediates such as receptor-interacting protein (RIP). Here, we show that NEMO binds to Lys 63- but not Lys 48-linked polyubiquitin, and that single point mutations in NEMO that prevent binding to Lys 63-linked polyubiquitin also abrogates the binding of NEMO to RIP in tumour necrosis factor (TNF)-α-stimulated cells, the recruitment of IKK to TNF receptor (TNF-R) 1, and the activation of IKK and NF-κB. RIP is also destabilized in the absence of NEMO binding and undergoes proteasomal degradation in TNF-α-treated cells. These results provide a mechanism for NEMO's critical role in IKK activation, and a key to understanding the link between cytokine-receptor proximal signalling and IKK and NF-κB activation.