Activation of transcription factor NF-κB in the innate immune system is tightly regulated to prevent excessive inflammatory responses. How NF-κB activation is terminated, however, is not fully understood. Here we report that PDLIM2 negatively regulated NF-κB activity, acting as a nuclear ubiquitin E3 ligase targeting the p65 subunit of NF-κB. PDLIM2 bound to p65 and promoted p65 polyubiquitination. In addition, PDLIM2 targeted p65 to discrete intranuclear compartments where polyubiquitinated p65 was degraded by the proteasome. PDLIM2 deficiency resulted in larger amounts of nuclear p65, defective p65 ubiquitination and augmented production of proinflammatory cytokines in response to innate stimuli. Our findings delineate a pathway by which PDLIM2 terminates NF-κB activation through intranuclear sequestration and subsequent degradation.