Autoregulation is one of the mechanisms of imparting feedback control on gene expression. Positive autoregulatory feedback results in induction of a gene, and negative feedback leads to its suppression. Here, we report an interesting mechanism of autoregulation operating on Drosophila Rel gene dorsal that can activate as well as repress its expression. Using biochemical and genetic approaches, we show that upon immune challenge Dorsal regulates its activation as well as repression by dynamically binding to two different kappaB motifs, kappaB(I) (intronic kappaB) and kappaB(P) (promoter kappaB), present in the dorsal gene. Although the kappaB(I) motif functions as an enhancer, the kappaB(P) motif acts as a transcriptional repressor. Interestingly, Dorsal binding to these two motifs is dynamic; immediately upon immune challenge, Dorsal binds to the kappaB(I) leading to auto-activation, whereas at the terminal phase of the immune response, it is removed from the kappaB(I) and repositioned at the kappaB(P), resulting in its repression. Furthermore, we show that repression of Dorsal as well as its binding to the kappaB(P) depends on the transcription factor AP1. Depletion of AP1 by RNA interference resulted in constitutive expression of Dorsal. In conclusion, this study suggests that during acute phase response dorsal is regulated by following two subcircuits: (i) Dl-kappaB(I) for activation and (ii) Dl-AP1-kappaB(P) for repression. These two subcircuits are temporally delineated and bring about overall regulation of dorsal during immune response. These results suggest the presence of a previously unknown mechanism of Dorsal autoregulation in immune-challenged Drosophila.