The eukaryotic transcription factor NF-kappa B plays a central role in the induced expression of human immunodeficiency virus type 1 and in many aspects of the genetic program mediating normal T-cell activation and growth. The nuclear activity of NF-kappa B is tightly regulated from the cytoplasmic compartment by an inhibitory subunit called I kappa B alpha. This cytoplasmic inhibitor is rapidly phosphorylated and degraded in response to a diverse set of NF-kappa B-inducing agents, including T-cell mitogens, proinflammatory cytokines, and viral transactivators such as the Tax protein of human T-cell leukemia virus type 1. To explore these I kappa B alpha-dependent mechanisms for NF-kappa B induction, we identified novel mutants of I kappa B alpha that uncouple its inhibitory and signal-transducing functions in human T lymphocytes. Specifically, removal of the N-terminal 36 amino acids of I kappa B alpha failed to disrupt its ability to form latent complexes with NF-kappa B in the cytoplasm. However, this deletion mutation prevented the induced phosphorylation, degradative loss, and functional release of I kappa B alpha from NF-kappa B in Tax-expressing cells. Alanine substitutions introduced at two serine residues positioned within this N-terminal regulatory region of I kappa B alpha also yielded constitutive repressors that escaped from Tax-induced turnover and that potently inhibited immune activation pathways for NF-kappa B induction, including those initiated from antigen and cytokine receptors. In contrast, introduction of a phosphoserine mimetic at these sites rectified this functional defect, a finding consistent with a causal linkage between the phosphorylation status and proteolytic stability of this cytoplasmic inhibitor. Together, these in vivo studies define a critical signal response domain in I kappa B alpha that coordinately controls the biologic activities of I kappa B alpha and NF-kappa B in response to viral and immune stimuli.