The NF-kappaB/Rel transcription factor family plays a central role in coordinating the expression of a variety of genes that regulate stress responses, immune cell activation, apoptosis, proliferation, differentiation, and oncogenic transformation. Interventions that target the NF-kappaB pathway may be therapeutic for a variety of pathologies, especially immune/inflammatory diseases. Using membrane translocating sequence (MTS) technology, we developed a cell-permeable dominant inhibitor of NF-kappaB activation, termed IkappaBalpha-(DeltaN)-MTS. This molecule contains a 12-amino acid MTS motif attached to the COOH-terminal region of a nondegradable inhibitor protein [IkappaBalpha-(DeltaN)]. The recombinant protein enters cells and localizes in the cytoplasm. Delivery of the IkappaBalpha-(DeltaN)-MTS to cell lines and primary cells inhibited nuclear translocation of NF-kappaB proteins induced by cell activation. The protein also effectively inhibited NF-kappaB activation in vivo in two different animal models: NF-kappaB activation in response to skin wounding in mice and NF-kappaB activation in lungs after endotoxin treatment in sheep. Inhibition of NF-kappaB by the IkappaBalpha-(DeltaN)-MTS in the endotoxin model attenuated physiological responses to endotoxemia. These data demonstrate that activation of NF-kappaB can be inhibited using a recombinant protein designed to penetrate into cells. This technology may provide a new approach to NF-kappaB pathway-targeted therapies.