Astrocyte elevated gene-1 (AEG-1) was initially identified as an HIV-1-and tumor necrosis factor A (TNF-A)-inducible transcript in primary human fetal astrocytes by a rapid subtraction hybridization approach. Interestingly, AEG-1 expression is elevated in subsets of breast cancer, glioblastoma multiforme and melanoma cells and AEG-1 cooperates with Ha-ras to promote transformation of immortalized melanocytes. Activation of the transcription factor nuclear factor KB (NF-KB), a TNF-A downstream signaling component, is associated with several human illnesses, including cancer, and NF-KB controls the expression of multiple genes involved in tumor progression and metastasis. We now document that AEG-1 is a significant positive regulator of NF-KB. Enhanced expression of AEG-1 via a replication-incompetent adenovirus (Ad.AEG-1) in HeLa cells markedly increased binding of the transcriptional activator p50/p65 complex of NF-KB. The NF-KB activation induced by AEG-1 corresponded with degradation of IKBA and nuclear translocation of p65 that resulted in the induction of NF-KB downstream genes. Infection with an adenovirus expressing the mt32IKBA superrepressor (Ad.IKBA-mt32), which prevents p65 nuclear translocation, inhibited AEG-1-induced enhanced agar cloning efficiency and increased matrigel invasion of HeLa cells. We also document that TNF-A treatment resulted in nuclear translocation of both AEG-1 and p65 wherein these two proteins physically interacted, suggesting a potential mechanism by which AEG-1 could activate NF-KB. Our findings suggest that activation of NF-KB by AEG-1 could represent a key molecular mechanism by which AEG-1 promotes anchorage-independent growth and invasion, two central features of the neoplastic phenotype.