A cDNA corresponding to the 2.6 kb NF-kappa B mRNA species present in a variety of lymphoid cell lines has been molecularly cloned. The deduced 607 amino acid sequence is identical to the sequence of the C-terminal region of 110 kd NF-kappa B protein. A 70 kd protein can be identified in lymphoid cells using antibodies raised against the C-terminal region of p110 NF-kappa B. Comparison of the two-dimensional tryptic peptide maps of the 70 kd protein expressed in cells and the in vitro translated product encoded by the cDNA display extensive homology. The 70 kd protein expressed in bacteria prevents sequence-specific DNA binding of p50-p65 NF-kappa B heterodimer, p50 homodimer, and c-rel. p70 also interferes with transactivation by c-rel and prevents its nuclear translocation. The 70 kd protein, predominantly found in lymphoid cells, is a new member of the I kappa B family of proteins and is referred to as I kappa B gamma.