The malignant Reed-Sternberg cell of Hodgkin disease is an aberrant B cell that persists in an immunolgically mediated inflammatory infiltrate. Despite its nonproductive immunoglobulin genes, the Reed-Sternberg cell avoids the usual apoptotic fate of defective immune cells through an unknown mechanism. A likely candidate is the surface receptor, CD40, consistently expressed by Reed-Sternberg cells, and the first link in the pathway to NF-kappa B activation, the central regulator of cytokine production and apoptosis. CD40 signaling in B lymphocytes coordinates the immune response, including immunoglobulin isotype switch and Fas-mediated apoptosis. CD40-induced NF-kappa B activation is mediated by adapter proteins, the TNF receptor (TNFR)-associated factors (TRAFs), especially TRAFs 2, 3, and 5. Using a Hodgkin cell line, this study demonstrates that CD40 activation of NF-kappa B is mediated by proteolysis of TRAF3. Results further demonstrate that the pathway can be blocked by treatment with pharmacologic doses of a specific protease inhibitor, pepstatin-A, even in the presence of a mutated NF-kappa B inhibitor, I-kappa B alpha. The stability of TRAF3 regulates CD40/NF-kappa B-mediated control of the immune response, which is central to the biologic activity of the Reed-Sternberg cell. Prevention of TRAF3 proteolysis may be an entry point for design of novel pharmaceuticals to treat Hodgkin disease and immune system disorders. (Blood. 2000;96:2841-2848)