Activation of NF-B requires two highly related kinases named IKK␣ and IKK␤ that share identity in the nature and positioning of their structural domains. Despite their similarity, the kinases are functionally divergent, and we therefore sought to identify any structural features specific for IKK␣ or IKK␤. We performed bioinformatics analysis, and we identified a region resembling a ubiquitin-like domain (UBL) that exists only in IKK␤ and that we named the UBL-like domain (ULD). Deletion of the ULD rendered IKK␤ catalytically inactive and unable to induce NF-B activity, and overexpression of only the ULD dose-dependently inhibited tumor necrosis factor-␣-induced NF-B activity. The ULD could not be functionally replaced within IKK␤ by ubiquitin or the corresponding region of IKK␣, whereas deletion of the equivalent section of IKK␣ did not affect its catalytic activity against IB␣ or its activation by NF-B-inducing kinase. We identified five residues conserved among the larger family of UBL-containing proteins and IKK␤, and alanine scanning revealed that the leucine at position 353 (Leu 353 ) is absolutely critical for IKK␤-induced NF-B activation. Most intriguingly, the L353A mutant was catalytically active but, unlike wildtype IKK␤, formed a stable complex with the NF-B p65 subunit. Our findings therefore establish the ULD as a critical functional domain specific for IKK␤ that might play a role in dissociating IKK␤ from p65.