The transcription factor NF-kappa B is retained in the cytoplasm by its inhibitor I kappa B-alpha. Upon cellular stimulation with a variety of pathogen- or stress-related agents, I kappa B-alpha is functionally inactivated and NF-kappa B translocates to the nucleus to trigger transcription of a large array of genes, many of which encode proteins critical for immune or stress responses. Here, we demonstrate that signal-induced proteolysis of I kappa B-alpha is an obligatory step for activation of NF-kappa B: calpain inhibitors I and II, which inhibit cysteine proteases, block activation of NF-kappa B by blocking degradation of I kappa B-alpha without affecting signal-induced phosphorylation of this inhibitor. This contrasts with previous models in which phosphorylation of I kappa B-alpha was postulated to be sufficient for activation. We demonstrate further that signal-induced phosphorylation of I kappa B-alpha does not by itself lead to dissociation of the inhibitor from NF-kappa B, providing a rationale for and confirmation of the need to proteolyze I kappa B-alpha in order to activate NF-kappa B. Signal-controlled, target-specific proteolysis is an unexpected, yet likely more general, mechanism for regulating transcription factors.