IB␣ retains the transcription factor NF-B in the cytoplasm, thus inhibiting its function. Various stimuli inactivate IB␣ by triggering phosphorylation of the N-terminal residues Ser32 and Ser36. Phosphorylation of both serines is demonstrated directly by phosphopeptide mapping utilizing calpain protease, which cuts approximately 60 residues from the N terminus, and by analysis of mutants lacking one or both serine residues. Phosphorylation is followed by rapid proteolysis, and the liberated NF-B translocates to the nucleus, where it activates transcription of its target genes. Transfer of the N-terminal domain of IB␣ to the ankyrin domain of the related oncoprotein Bcl-3 or to the unrelated protein glutathione S-transferase confers signal-induced phosphorylation on the resulting chimeric proteins. If the C-terminal domain of IB␣ is transferred as well, the resulting chimeras exhibit both signal-induced phosphorylation and rapid proteolysis. Thus, the signal response of IB␣ is controlled by transferable N-terminal and C-terminal domains.The transcription factor NF-B is present in the cytoplasm of most animal cells. Much of it is retained there in an inactive form by the inhibitory protein IB␣, which binds to it and masks the nuclear localization signal (7,22,23). When cells are stimulated by a wide variety of agents, including phorbol esters, cytokines, viruses, and stress, IB␣ is first rapidly phosphorylated, then ubiquitinated, and finally degraded by proteasomes (1, 8, 12-18, 34, 35, 38, 42-45, 47; reviewed in references 3, 5, and 40). This allows translocation of NF-B to the nucleus, where it transactivates a large array of genes important in the defense of the organism. We previously showed by mutational analysis and two-dimensional electrophoresis that phosphorylation of serines 32 and 36, the two most N-terminal serine residues of IB␣, occurred upon stimulation and that induced phosphorylation was essential for proteolysis (13). Direct, independent proof is now presented that in fact both serines must be phosphorylated in order for signal-induced proteolysis to occur. We also show that mutation of either serine does not necessarily block induced phosphorylation of the other. However, such singly phosphorylated forms are very efficiently dephosphorylated by endogenous phosphatases unless appropriate phosphatase inhibitors are present. These observations confirm and extend recently published data on the subject (18, 44, 47).Previously we showed that, in addition to N-terminal phosphorylation and ubiquitination (primarily on lysine residues 21 and 22 [4,34,38]), the C-terminal 41 amino acids of IB␣ also contribute to rapid signal-induced proteolysis (13). Similar conclusions have been reached by others (47), but there have also been reports suggesting a less critical role for the C terminus during induced degradation in different cells (2,43,46). Now we report that the signal-induced phosphorylation response of IB␣ can be transferred to heterologous polypeptides by their fusion to the N-terminal domain of IB␣...