The I kappa B kinase (IKK) complex, which is composed of the two kinases IKK alpha and IKK beta and the regulatory subunit IKK gamma/nuclear factor-kappa B (NF-kappa B) essential modulator (NEMO), is important in the cytokine-induced activation of the NF-kappa B pathway. In addition to modulation of IKK activity, the NF-kappa B pathway is also regulated by other processes, including the nucleocytoplasmic shuttling of various components of this pathway and the post-translational modification of factors bound to NF-kappa B-dependent promoters. In this study, we explored the role of the nucleocytoplasmic shuttling of components of the IKK complex in the regulation of the NF-kappa B pathway. IKK gamma/NEMO was demonstrated to shuttle between the cytoplasm and the nucleus and to interact with the nuclear coactivator cAMP-responsive element-binding protein-binding protein (CBP). Using both in vitro and in vivo analysis, we demonstrated that IKK gamma/NEMO competed with p65 and IKK alpha for binding to the N terminus of CBP, inhibiting CBP-dependent transcriptional activation. These results indicate that, in addition to the key role of IKK gamma/NEMO in regulating cytokine-induced IKK activity, its ability to shuttle between the cytoplasm and the nucleus and to bind to CBP can lead to transcriptional repression of the NF-kappa B pathway.