NF-kappaB dimers, inhibitor IkappaB proteins, and NF-kappaB.IkappaB complexes exhibit distinct patterns in partitioning between nuclear and cytoplasmic cellular compartments. IkappaB-dependent modulation of NF-kappaB subcellular localization represents one of the more poorly understood processes in the NF-kappaB signaling pathway. In this study, we have combined in vitro biochemical and cell-based methods to elucidate differences in NF-kappaB regulation exhibited by the inhibitors IkappaBbeta and IkappaBalpha. We show that although both IkappaBalpha and IkappaBbeta bind to NF-kappaB with similar global architecture and stability, significant differences exist that contribute to their unique functional roles. IkappaBbeta derives its high affinity toward NF-kappaB dimers by binding to both NF-kappaB subunit nuclear localization signals. In contrast, IkappaBalpha contacts only one NF-kappaB NLS and employs its carboxyl-terminal proline, glutamic acid, serine, and threonine-rich region for high affinity NF-kappaB binding. We show that the presence of one free NLS in the NF-kappaB.IkappaBalpha complex renders it a dynamic nucleocytoplasmic complex, whereas NF-kappaB.IkappaBbeta complexes are localized to the cytoplasm of resting cells.