Bcl10 is a critical regulator of NF-kappa B activity in T and B cells, coupling antigen receptor signaling to NF-kappa B activation via protein kinase C (PKC). Here we show that PKC or T-cell receptor (TCR)/CD28 signaling results in downregulation of Bcl10 protein levels, thereby attenuating NF-kappa B transcriptional activity. Bcl10 degradation requires an intact caspase recruitment domain and is not observed after stimulation with tumor necrosis factor alpha or lipopolysaccharides. Bcl10 downregulation is not affected by proteasome inhibitors but is accompanied by transient localization to lysosomal vesicles, suggesting involvement of the lysosomal pathway rather than the proteasome. The HECT domain ubiquitin ligases NEDD4 and Itch promote ubiquitination and degradation of Bcl10, thus downmodulating NF-kappa B activation. Since CD3/CD28-induced activation of JNK is not affected by the decline of Bcl10, degradation of Bcl10 selectively terminates IKK/NF-kappa B signaling in response to TCR stimulation. Together, these results suggest a new mechanism of negative signaling in which TCR/PKC signaling initially activates Bcl10 but later promotes its degradation.